Family business succession: how to pass your business on to family members
Family Business succession
Passing your business on to your children or other family members involves more than reaching good agreements about the transfer. In a family succession, the value of the business, financing, tax implications, and the interests of family members all play an important role. You will also need to consider the continuity of the business and your own future role.
Sooner or later, every business owner faces the question of who will continue the company. A transfer within the family often involves more considerations than a regular sale. Is the intended successor ready, both in terms of knowledge and motivation? How do you deal with children or other family members who are not active in the business but may still share in the inheritance? And how do you create a transfer that is both financially viable and fair to everyone involved?
Situations in which we can support you
We help entrepreneurs in situations such as:
- you want to transfer the business to one or more children, while not all children are active in the company;
- you want to make use of tax facilities for business succession while also taking the interests of other family members into account;
- you are unsure about the right time to start the succession process or about the role you would like to retain yourself;
- you want to determine the value of the business as a basis for the transfer and a balanced distribution;
- the successor is unable to finance the purchase price entirely from their own resources;
- you are looking for the right combination of personal funds, external financing, and phased payments to the transferor.
A family business succession often starts with a good conversation. Would you like to know what is needed in your situation? We would be happy to think along with you from the very beginning.
Valuation and financing of your business
A sound valuation often forms the starting point of a family business succession. However, determining the value of the business does not automatically mean that the transfer is financially feasible. The successor must be able to finance the acquisition without placing undue pressure on the company.
That is why we look not only at the value of the business, but also at the feasibility of financing the transfer. This may involve the successor’s own funds, bank or other external financing, a loan from the transferor, phased payments, or a combination of these options. We also assess the impact of the chosen financing structure on the company’s cash flows and financial position.
This allows us to develop a financing structure that fits the business, the successor, and the transferor, while maintaining a healthy foundation for the future.
Tax considerations and the BOR
The tax structure of a business succession also requires careful attention. One relevant scheme is the Business Succession Scheme (BOR). If the applicable conditions are met, this scheme can reduce gift tax or inheritance tax when a business is transferred. However, the conditions and opportunities depend on the specific situation and may change as a result of new legislation and regulations.
That is why our tax specialists look beyond the opportunities available today. We also assess which structure is appropriate and sufficiently flexible, allowing adjustments to be made in time if circumstances or regulations change. The focus is not only on making use of tax facilities, but above all on achieving a business transfer that is both commercially sound and sustainable in the long term.
Guidance from preparation to transfer
In a family business succession, financial, tax, business, and personal interests come together. We help make these interests transparent and guide the process from the initial exploration through to the actual transfer.
We support you with:
- determining the value of the business;
- assessing the financial feasibility of the transfer;
- developing an appropriate financing structure;
- evaluating tax opportunities;
- balancing the interests of family members involved;
- structuring and managing the succession process.
This allows us to work towards a transfer that is not only well organised on paper, but also practical for the successor, responsible for the business, and the right fit for the family.
