Together with our clients, we elaborate a succession plan and analyse the alternatives. In doing so, we take into account both internal and external corporate succession.
In succession planning, arrangements must be made regarding the future management of the company and the shareholder structure. This concerns in particular the question of whether the company shares are to be inherited within the family or whether a sale to family outsiders is an option. Furthermore, the future financing of the company must be planned. Additional financial resources may be required, for example, through the withdrawal of shareholder loans by the "seniors" or payments to heirs. The tax and legal optimisation of the business succession must also be considered.
Our aim is to find a solution that is tailored to the entrepreneurial family and addresses the interests of all parties involved.
Corporate succession involves making arrangements for both planned and unplanned succession:
Our advice also includes the regulation of unexpected business succession. Unexpected succession arises from illness, accident or death of the entrepreneur, while unplanned succession is caused by disputes within the entrepreneurial family or divorce.
Provisions can be made for unexpected succession. In order to prevent the company from being left without management in the event of an unexpected absence of the entrepreneur, a clear representation arrangement and powers of attorney for a temporary management are necessary. All important documents can be compiled in an "emergency case". This includes an overview of all relevant deeds and contracts, bank powers of attorney and access codes or passwords. Furthermore, important contact persons at customers, suppliers, banks and consultants should be named.
Models for regulating corporate succession
1. Models of internal succession
2. Models of external succession and their objectives
External executive (management buy-in – MBI):
Executive of the company (management buy-out – MBO):
A good half of all German family businesses resolve their succession within the family. Many complications can be avoided through careful preparation. Together with the entrepreneurial family, we analyse possible scenarios in order to include the expectations and wishes of the family members in the decisions.
Possible solutions are
In addition to the regulation of future personnel and corporate law structures, the focus of our advice is on the financing of the company and the fair distribution among the heirs.
Procedure of a company succession
1. Situation analysis
4. Succession controlling: review of the success of the handover, including the following aspects
Execution of a will comes into consideration particularly if the heirs are not in a position to settle the succession or administer the estate (e.g. minor heirs). Executors can make a significant contribution to avoiding disputes between the heirs and achieving the testator's goals.
The arrangement of an execution of a will enables the testator to exert influence beyond death. The goals are often a simplification of the settlement, the secured fulfilment of legacies and the professional implementation of the testator's will.
IfW assumes the tasks of executorship as a legal entity. This has the advantage for the testator that the company assumes the functions of the executor responsibly, independent of the person, and is "immortal" as a limited liability company.
The typical tasks of the executor in the execution of the last will and testament include: