Business succession and transfer.

The first question is into whose hands the business should pass. Succession within the family preserves continuity but requires clear rules on the compulsory portion, on balancing claims among siblings and on providing for the person handing over. A sale to third parties brings a purchase price but ends the connection to the family entirely.

A third option is the management buy-out, in which senior employees take over the business. This route secures knowledge and customer relationships but raises questions of financing and of the transition phase. We examine with you which option suits the family, the business and the time horizon.

Depending on the route, the handover is implemented through a sale agreement, a transfer agreement or a gift. Where the handover is made against maintenance benefits or against the grant of a right of residence, the mutual obligations must be set out precisely. With a gift, the consequences under the law of compulsory portions and possible set-offs have to be considered.

If the business is continued, the transfer of business under the AVRAG applies: the employment relationships pass to the transferee with all rights and obligations. The employees must be informed and a right of objection has to be observed. We draft the contracts so that the handover and the transfer of the employment relationships fit together.

The tax structuring is decisive for the success of the handover. For the gratuitous transfer of a business, income tax law provides reliefs, such as the continuation of book values. Where the handover is made for consideration, allowances and special tariff rules may apply. We clarify these questions together with your tax adviser.

The time horizon is decisive: those who plan succession years in advance can use the periods required for tax reliefs, train the successor and carry out the handover step by step. We recommend addressing the topic early, because a well-considered handover takes time and cannot be forced.

A handover proceeds in stages: first the goal and the route are clarified, then the business is valued, then the contract and the financing are negotiated, and finally the handover is carried out. Even the early steps set cornerstones that are hard to move later. That is why the planning should begin early.

On the documents side you need, depending on the route, a transfer agreement or a sale agreement, the articles of association, a company valuation and, in a buy-out, the financing commitments. If the business is continued, the employee information under AVRAG must be prepared. We compile the documents and carry out the handover in an orderly way.

Caution is warranted when succession is begun too late, when the compulsory portion claims of other heirs remain unresolved, when the financing for a management buy-out is not in place or when the employee information under AVRAG is forgotten. Such gaps lead to dispute, delay and avoidable tax consequences.

The sensible next step is an early legal and tax alignment of your starting position. We order the suitable route, align it with your tax adviser and accompany the handover from planning to completion.