Tax

Tax / Family businesses and succession

Family businesses and succession


The transfer of authority, knowledge and ownership is a process just as unavoidable as complex and long-lasting. Importantly, it must be well thought over and appropriately planned. There always comes the time when decisions must be made about the future of one’s business. Incidentally, succession affects not only the heirs and their successors, but also affluent persons having a complex family situation, who might have children from various relationships, undivided property from the previous marriage, or no nuptial agreement in the current marriage. In this situation, it is crucial to take an informed approach to the transfer of property and business. This approach consists in acknowledgment that succession does not only mean correct preparation of the last will, but that it is a process which involves both economic, legal, tax, and psychological aspects. A failure to accommodate any of these areas is the reason why some family businesses do not last long once transferred to inheritors.

Preparation of a business transfer strategy is always of importance. A succession method planned appropriately by the entity owner materially mitigates the risk of succession obstacles arising, and also eliminates the likelihood of the entity’s deterioration as a result of changed managers.

A succession plan prepared appropriately in advance enables designation of the future successor, and indication of the time when the knowledge and the property is transferred to him/her. In addition, the succession plan defines the role of the Senior Founder of the business in the family future, once his/her business career ends. Such plan also contains accurate guidance about the usage of family property and the business future in case the designated successor passes away. In order for the plan to be meaningful, it should be updated as appropriate for the current situation, also bearing in mind family business’ developmental stages.

Our team comprises experienced lawyers licensed to practise as tax advisors, attorneys-at-law, advocates and/or accountants. We feature a tailored approach both to your business and to your doubts arising from intergenerational succession.

We ensure the comfort of professional services run by one dedicated team of experts which will give you appropriate support based on their comprehensive knowledge of your personal and business situation and of the objectives you wish to achieve. Being aware of the fact that succession entails not only legal or tax issues, but also – or maybe even first of all – emotions, we co-operate with reputable business psychologists.

Based on our experience in the provision of tax and legal services to business entities (including family businesses), we offer you comprehensive intergenerational succession services involving e.g.:

  • preparing a ”Succession Plan” customised to your needs and expectations, which will cover business conditions of the operations being performed and will enable the transfer to be carried out safely and optimally from the legal and tax perspectives. This plan is implemented based on both domestic and international solutions. As part of the project, we (1) develop a succession strategy, (2) draw up a last will and testament/Family Constitution/nuptial property agreement/partnership agreement, and (3) take actions intending to secure interests of persons closest to the successor, including non-family members;
  • restructuring the operations, which will mainly consist in such re-organisation of the business activity that it can serve the purpose of the planned intergenerational succession (i.e. separation of the private from the business property) and which, if possible, will enable achievement of tax efficiency. Our support in this respect will cover in particular establishment of Polish and/or foreign companies/partnerships and transfer of appropriate assets to them, revaluation of high value assets, and development of appropriate documentation needed to mitigate legal and tax risks;
  • supporting you in the establishment of a private foundation as an institution comprehensively securing property and its succession for the family generations to come, in case of unforeseeable events;
  • protecting interests of the closest family members by ensuring their access to funds kept in the testator’s bank accounts or to participation units in investment funds, which is not a standard in Poland due to the restrictive Banking Law regulations and the long-lasting succession proceedings. Our support covers a review of agreements executed by the testator with financial institutions for the existence of solutions enabling the heirs to access the funds/participation units kept in the testator’s accounts (e.g. use of the contribution in case of death) after he/she passes away, and if such solutions are missing – proposing specific provisions and potentially participating in negotiations with the financial institutions.

We co-operate with institutions the purpose of which is integrating and strengthening family businesses and supporting their growth. As such, we actively participate in organising and holding conferences and workshops concerning succession issues.

Please do not hesitate to contact us.

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CONTACT

Paweł Tomczykowski

Paweł Tomczykowski

Managing Partner, President

p.tomczykowski@ozogtomczykowski.pl

+ 48 22 480 81 00