Entrepreneurs reach a point where they consider to take a step back or want to retire, but that doesn’t mean the end of the company. Maybe there is a son or daughter who keeps the company growing, or what about that valued employee?
Business succession is a process that as an entrepreneur you should not leave until the very last minute. There are a number of steps to be taken before business succession can proceed successfully. There are a number of provisions available within tax legislation that can reduce the tax burden, both for the acquiring party and for the transferor.
Obviously, parties must meet a number of conditions before business succession can be effected fiscally. In addition, it is also relevant in business succession within the family to know that the transfer price is acceptable for tax purposes. To that end we can also draw up an objective company valuation that can be used in preliminary consultation with the tax authorities.
Last but not least, it is important to organise the corporate structure in such a way that it promotes saleability, for example by placing the real estate separately in the structure, as well as the pension provision for the owner or former owner. The applicable deadlines must obviously be observed. And don’t forget: it is also a difficult process emotionally seen. For years, the entrepreneur has put his or her heart and soul in to developing the company that now exists. To then transfer it to another person and lose or reduce (son, daugther) their influence on the company can have a profound effect.
If you are wondering what a business succession of your company might look like and would like a no-obligation conversation about the possibilities then contact us.