In many entrepreneurial families, the main part of the assets consists of the actual business. Therefore, there is very often a desire to keep the business in the family in the long term, even if there is no suitable successor within the family.
The search for and elaboration of a suitable long-term solution for business succession requires a long time horizon of usually significantly more than 2 years. It is about the long-term security of one’s own life’s work, but also about generating sufficiently high returns for a carefree retirement.
The family foundation to safeguard the life’s work
In the case of larger companies, it may also make sense to consider a family foundation as a holding company. The purpose of the foundation is primarily to provide for the founder and the founder’s family. This not only leads to considerable tax advantages in the medium and long term.
By setting up a foundation advisory board, the influence on the management, which may be outside the family, can be secured. The founder has a wide range of options for structuring the powers of individual organs of the foundation.
Prevent inheritance disputes through clear succession regulations
Especially if there are a large number of family members and thus potential heirs, inheritance disputes can be prevented in the long term through a foundation model, as can a possible threatened sale of the company after the entrepreneur’s death. A clear formulation of the foundation’s purpose helps to ensure that the life’s work is dealt with in the entrepreneur’s best interests in the long term.
In addition, the provision aspect of the family should not be underestimated. With a family foundation there is the possibility, unlike with a charitable foundation, to allocate the income of the foundation to the entrepreneur and the relatives in any amount.
The experts from K.E.R.N. and Partner ? The succession specialists will be happy to help you with the detailed design. A pool of experts is available for the legal and fiscal assessment.
Tips for further reading:
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Preparing for business succession - 3 practical tips
Advice traps in the process of business succession
Free webinars on business succession
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