Planning to retire from your own business

Retirement in general can be complex, with many different decisions to be made. When is the right time to take retirement? Should you do it early or wait until there is a larger nest-egg available? How will retirement affect you, your health, home life etc? These are all important questions but what about those individuals who own their own business. When you are the boss, how do you navigate the process of retirement?


One of the main factors which dictates if and when someone chooses to retire is timing. Everyone is different, with different circumstances which will affect your relationship with work. Those with greater responsibility or a more stressful position overall, may find themselves thinking of retirement earlier. Also, work-life balance is another important factor, especially when children and grandchildren are involved. Therefore, early-retirement may seem more attractive when the alternative is less time at home.

Whilst there are lots of benefits to retiring, there are also some drawbacks, which should be factored into your decision. For example, many older people are apprehensive to come out of work as they feel like they’ll become redundant. There is also some research to show that remaining in work longer can keep you healthier, both mentally and physically. Of course, this has to be contrasted with the stress of full-time work. Obviously, one of the main disadvantages of retiring is the possibility of less money and therefore a lower quality of life. However, this is something that can be planned for in advance, ensuring that you have a decent nest-egg for when you eventually do retire.

Whilst the timing of a retirement affects everyone, when it comes to retiring from your own business, there are specific considerations.

Selling the Business

Business owners who are planning on retiring will have to decide whether to sell their company. This is a relatively easy and quick way of moving on and passing the business on to a new owner. The business owner sells all of their shares in the company and a new majority shareholder takes over. However, some owners may want to move on from heading the company but still have a vested interest. In this instance, they may choose to retain some of their shares. Of course, they could also remain as the head in name only but pass on the responsibility to a manager. This way you get to live their retirement, without losing the business. Some owners may choose this approach of a slow, changing of the guard as it allows them to pass on control to a family member or child.

Ending the Business

There are instances in which the sale of the business is not a viable option- for example, the company is struggling. There may also be a scenario in which a business owner has no one they want to pass the business on to and therefore would prefer to close it. In these situations, there are different options to choose from.

Member’s Voluntary Liquidation is a method of ending a business, that requires the agreement of the majority of directors. The process can be expensive but overall, it can be much more tax-efficient, especially were dividends are concerned.

A simpler and cheaper way of closing the business involves applying to have it struck off the register of companies. Businesses will only be able to make this application after not trading for three months.


Many people worry about how they will fund their retirement. Of course, business owners who sell their companies are at an advantage when it comes to a pension. However, not all owners are as lucky, for example a business may become insolvent, be shut down or sell for a small amount. Fortunately, there are other assets available to those who retire, whether that be an occupational pension, private pension and the state pension.

When it comes to living comfortably after retirement, preparation is key. Fortunately, the experts at Salhan Accountants offer a comprehensive retirement and pension planning service. The team can provide invaluable advice, ensuring that your transition into retirement is smooth, easy and beneficial.