Business succession and transfer

Business succession and transfer is a complex and dynamic process. It is never too early to think about this, because it impacts many aspects of your business and your personal life. Well begun, i.e. proper preparation, is half done. Which issues are involved in business succession and transfer? Where to begin?

You own a company that you will want to transfer or sell at some point. Perhaps you already have an idea of whom to transfer the business to, for instance your child or children, or one or more employees.

Dynamics in a succession and transfer process

As an entrepreneur you are devoted to your own business and you want to transfer everything to an appropriate successor in the best possible way. In addition, you undoubtedly have a certain vision of the future, for instance, when it comes to your own involvement, the long-term strategy and any other shareholders. However, the (prospective) successor may think differently about certain aspects. Based on our expertise and consultations with you and/or your successor(s), together with you we will guide the company towards a successful transfer.

Tax guidance

In addition to (re)structuring your business assets and appropriate governance, the fiscal playing field is of great importance to a successful transfer. In order to make good use of the business succession scheme in both income tax and inheritance and gift tax and the constantly changing regulations in this respect, tax guidance is advisable.

Business succession scheme

If the Business Succession Scheme (BOR - Bedrijfsopvolgingsregeling) applies in full to the acquisition of the company by your children, the inheritance or gift tax due will actually amount to approximately 3.4% of the value of the qualifying business assets, instead of a maximum of 20% if the BOR would not apply. However, there are several conditions for this to be applicable. Not every business is eligible for this liberal scheme. In addition, the composition of the company's assets is taken into account. In principle, the BOR does not apply to assets that are held exclusively for investment and not for operating the company. The scheme was created in order to minimally obstruct the continuation of an active business by the next generation through a limited levy of inheritance or gift tax on the transfer.

Forvis Mazars can assist you

The Forvis Mazars specialists will be happy to enter into discussions with you and be your sparring partner for all questions you may have. We do this by looking at the tax aspects, but also at the financial consequences, your own asset management and the long-term business strategy. Of course, we will not lose sight of the dynamics between the parties involved. You may also contact us if there is an urgency to the succession and transfer of the business. You will always have a regular consultant who will arrange for anything for you.

Follow-up in the family business - part 1 of 4

27 January 2020 - Business succession within family businesses is usually a complex and emotional issue. It is never easy to distance yourself from your company as a transferring party. After all, you have devoted a large part of your life to your company full of passion. Proper (and timely) preparation for your follow-up is an important condition in order to be able to guarantee the continuity of...

Follow-up in the family business - part 2 of 4

20 February 2020 - Our four-part for the family business E-Byke B.V. to be continued: Ad (63 years old) and his wife Bianca (61 years old) are married under marital conditions (cold exclusion). Ad owns 100% of the shares in E-Byke B.V. Ad wants to transfer the company to his daughter Cindy (29). Cindy has been working for E-Byke B.V. for some time. and is engaged in purchasing the parts for the electric...

Monitoring in the family business - part 3 of 4

30 April 2020 - The following situation is outlined in the first part of this four-part section: Ad (63 years old) and his wife Bianca (61 years old) are married under marital conditions (cold exclusion). Ad owns 100% of the shares in E-Byke B.V. Ad wants to transfer the company to his daughter Cindy (29). Cindy has been working for E-Byke B.V. for some time. and is engaged in purchasing the parts...

Monitoring in the family business - part 4 of 4

8 June 2020 - In the last part of this four-part section, we will discuss some other options in the transfer of the E-Byke B.V. shares. to Cindy: succession with cumulative preference shares, a trust office foundation and priority shares. An investment by private equity can also facilitate business succession within the family.

Concern among family businesses

26 April 2021 - Since the parliamentary elections earlier this year, family businesses have been fearful of a possible scaling down or abolition of business succession facilities.Some parties want to soften or even abolish the business succession scheme, which is based on a conditional exemption from inheritance and gift tax when business assets are transferred.