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Intra-family business transfers
The transfer of a business to the next generation often raises questions of matrimonial property law, inheritance law and corporate law. Particularly in businesses characterized by an entrepreneur combining capital and labor, the change of generation is regularly a delicate operation. The best solution is to deal with the succession at an early stage, involving the family members. In this way, the interests of the company and the family can be taken into account and a smooth and satisfactory transfer of ownership can be achieved for the benefit of all parties involved.
Planned succession is one of the components of the succession strategy, as it ensures the continuity of the business after the death of the owner. The marital regime of the spouses has a significant influence on the succession. In the absence of an agreement to the contrary, the spouses are subject to the ordinary matrimonial regime of participation in acquests, at the dissolution of which each spouse participates in half of the other's property. In anticipation of an intra-family business succession, it may be advantageous to optimize the ordinary matrimonial regime by means of an agreement as to succession.
This agreement will lay the groundwork for a planned succession. It is also possible to include provisions that will allow the surviving spouse to continue to live in good financial conditions by allocating other assets or the usufruct of shares in the business. The planned revision of the law of succession will considerably facilitate succession within the family. By reducing the inheritance reserves, the testator's freedom of disposal will be increased and the generations taking over the business will be given more opportunities.
If the still active entrepreneur integrates successors during his lifetime, a shareholders' or partners' agreement can serve as an additional structuring instrument. In addition to restrictions on disposal and reciprocal acquisition rights, this agreement usually contains agreements on the division of roles, voting and profit distribution policies as well as scenarios for the departure of the entrepreneur. In the case of partnerships, the continuity of the company can be ensured by a continuation, entry or succession clause.
The transfer of a business is particularly multidimensional when ownership and management are to be entrusted to intra-family successors. In particular, it is necessary to take into account the property and inheritance rights and obligations of the spouse and uninvolved heirs and to establish a coherent relationship between the available legal instruments.
If you have any questions regarding the transfer of a company, we will be pleased to advise you.
