Generational change of ownership

A generational change is a special case of a change in ownership of a company. The main difference is that, under certain conditions, tax breaks can be achieved at generational change. The generational change often involves lower transactional prices, donations, and various variations in between.

In general, there is not just one right way to implement generational change. It is usually a good idea to start planning well in advance, even several years before the generational change. Generational change is a long-term and time-consuming process in which emotions are also involved.

The most time-consuming step may be to determine who will become successors, and with what shareholdings. Before the transfer of ownership, the tax consequences can be reduced by, for example, changes in the company form or the shareholders' agreement, distribution of dividends, division, directed share issue, and the acquisition of own shares. These are time-consuming measures that should be considered with the help of experts.

However, if there is no successor for the company and, for example, the health of the entrepreneur prevents the continuation of the business, a controlled shutdown of the company is also an option. We will help you in that situation as well.

For the entrepreneur who is giving up

At the beginning of the process, make sure that your own income and future pension is sufficient. You can earn extra income by leaving part of the company to yourself and raising dividends. Or maybe you'll always help the new entrepreneur when needed? With generational change of ownership, a new chapter in your life is about to begin. How you write it is up to you. If entrepreneurship has taken up all your time, giving it up can be hard. Try to let go and focus your energy on something else, such as hobbies or grandchildren. Now is the time to enjoy what you have missed as an entrepreneur.

For the new entrepreneur who is taking over

Make preparations well in advance and discuss with all parties. Take a look and research the company's background in different ways. Use the information to secure your true will. Do you really want to take over this company? Get an expert involved right at the start of the process. Talk openly with both the current entrepreneur and the next of kin and other heirs. Ambiguities create unnecessary contradictions.

In the case of generational change of ownership, there may be difficulties in giving up and disagreements within the family, as well as business disruptions caused by these. You should be aware of these challenges in advance and work to overcome them. Find out who is interested in taking over the company and agree how you will proceed. If there are more than one candidate to take over, define the roles for everyone. Also consider your own role: whether you will join the operational activities or be solely the owner.

Secure that you have enough knowledge and, if necessary, get training in both entrepreneurship and economics. In addition, take a look at the company's field of activity and find out as much as possible about its current situation and future prospects. Predicting challenges, preparing for them and quickly solving them will enable success in generational change of ownership.