Company succession
Our business law firm provides legal protection for your business, contracts and personnel matters.
We offer you professional and discreet cooperation for the effective implementation of company succession in Saxony.
The legal team at the law firm white ip | Patent & Legal in Dresden specializes in advising on company succession and business transfers between generations. We can help you to find the best possible solution for a change of ownership, taking into account the legal aspects. Starting with questions such as “What are the requirements for company succession?” through to “How will company succession affect my pension provision?”, you will receive competent and comprehensive advice on company succession in Dresden, taking into account economic, social and tax law advantages and disadvantages.
Our team is available for you by telephone on 0351 -896 921 40 or at the e-mail address kontakt@white-ip.com for you.
We are available for consultations in Dresden, Leipzig, Berlin, Cologne, Munich, Hamburg and beyond. Contact us with your request and your wish for an online or on-site consultation!
We will find an appointment together.
What you should know about company succession
Company succession wanted - family or external?
Almost half of business successions take place within the family. Emotional aspects play a decisive role, especially when companies are handed over within the family, for example to a child. For this reason, it is important to think “early about later“.
From a legal point of view, there are a variety of possible arrangements for company succession. For this very reason, it is important for every entrepreneur to develop a solution that is individually tailored to the company and the family environment, based on their specific individual case and against the background of the legal possibilities and tax contexts.
It would certainly be a pleasant solution if the company could be passed on to the next generation and thus remain in family ownership. However, the focus should be on the competence of the successor and not on their family affiliation. The protection of the company should always come first, as it cannot be in the interests of the entrepreneur that his life’s work is destroyed when he leaves the company.
Economic considerations for company succession
It is of fundamental importance what form the entrepreneur considers as consideration for the transfer of his company. The liquidity of the transferee should not be restricted too much. Above all, the aim should be to ensure the continued existence of the company and the preservation of jobs and economic existence in the long term.
A major problem is that many entrepreneurs miss the opportunity to think about the right retirement provision at an early stage. They rely on the fact that they can either transfer their company by handing it over, e.g. by bequeathing it to a descendant in order to receive a good pension for their retirement, or that they can sell it for a good price.
However, they often do not know how much their company is really worth and whether a solvent successor can be found for the business succession. Similarly, the current economic situation at the time of the sale is often not taken into account. Early preparation for the change of management is therefore essential in order to keep the company on the market. Not least because a number of tasks need to be mastered for a successful transfer, which will be a major challenge for both the owner and his future successor.
Opportunities for company succession
If the company is sold, the purchase price could either be a one-off payment or a recurring payment (e.g. installment, annuity or a permanent charge).
In the case of a one-off payment, the purchase price is paid immediately and in one amount. This is not dependent on the further economic success of the company.
If purchase price installments are fixed, the payment due is made in stages according to fixed dates. With this variant, it would also be possible to create an interest component and include a value protection clause in order to adjust the installments to the living expenses of the previous owner. If the owner and the purchaser have agreed to sell the property in return for annuity payments, this includes a lifelong annuity payment at equal intervals and in the same amount.
In addition to those already mentioned, there are other options for transferring a company. One of these is the transfer against reservation of usufruct. The purchase price ultimately received always depends on the profitability of the company and the new managing director is authorized to deduct his remuneration before calculating the profit.
It is also possible to lease the company. The amount of the lease depends on the economic performance of the business. The lease agreement itself can be concluded informally, but the written form is strongly recommended.
In addition to these options, entrepreneurs can also use sub-participation as an instrument for structuring company succession. Sub-participation is a flexible option, which is recognized for tax and legal purposes, for tackling company succession at an early stage. With the help of a sub-participation agreement, shareholders are permitted to give other persons an economic and entrepreneurial stake in their business share. The co-determination and possibly co-decision rights arising from the sub-participation are particularly suitable in family businesses in order to introduce and involve the potential successor in the company’s affairs.
If you would like advice on company succession in Dresden, including the possibility of sub-participation as a structuring instrument for company succession, we will be happy to provide you with advice. If tax advice or coaching measures are required, our clients can fall back on our network of experienced partners.
Succession planning
Of fundamental importance is the advice and planning of
- Drafting of company wills, company-suitable inheritance and marriage contracts, waivers of compulsory portions, company powers of attorney
- Execution of wills for the continuation of the business
- Emergency planning for the entrepreneur
- Preparation of analyses and plans in relation to the upcoming handover of the business
- Protecting the departing entrepreneur
- Tax optimization
The legal work of white ip | Patent & Legal also consists of finding new, profitable and viable solutions. We prepare comprehensive succession planning with special consideration of all stakeholders such as employees, customers, suppliers, successors, banks and, last but not least, the person of the entrepreneur, weighing up conflicting interests.
We would like to point out that reading the above information is not a substitute for personal legal advice, but merely provides an initial basis for information. We are of course available at any time for a detailed personal consultation. We are active throughout Germany, particularly in the area of commercial and corporate law. In the area of corporate law, our legal activities are concentrated primarily in the Free State of Saxony.
Speak to our experts
Albrecht Lauf
white ip | Patent & Legal
Königstraße 7 | 01097 Dresden
Sabrina Lahne
white ip | Patent & Legal
Königstraße 7 | 01097 Dresden
Dieter Merz
white ip | Patent & Legal
Königstraße 7 | 01097 Dresden
Josephine Klawon
white ip | Patent & Legal
Königstraße 7 | 01097 Dresden