Nowadays, one of the biggest challenges that family businesses need to face is handing over the controls in the company to the next generation. It is not an easy or quick process. The process requires many years of preparation and selection of appropriate tools. Bad succession plan can not only harm the development of the business but also cause family problems.
The assumption of the succession process is to ensure the enterprise durability against difficult and unavoidable generational changes. Good succession plan also secures the future of the family based on accumulated assets. Durable solutions must be built on solid foundations. The same rule works with the succession. It requires careful planning and selection of tools to protect the interests of all parties, but also to prepare a contingency plan in the event of unforeseen events.
Family and property conditions, various forms of doing business, or specific goals and assumptions mean that the succession plan must always be tailor-made. Without this, it will not be possible to introduce solutions that will protect the two most valuable values in the future: family well-being and security, and business continuity.
We provide our clients with professional support of a dedicated team of advisors who, by familiarizing themselves with the personal and business situation of the senior and successors, as well as the goals they want to achieve, will provide appropriate assistance and will guide them through a difficult succession process step by step.
8 steps to successful succession
- Planning - the sooner the better
A succession that meets the expectations of both the current business owner and future successors requires a tailor-made strategy and the time to implement it. Don't hesitate - think about the future today!
- Family business - what do we really hand over?
It is important to carefully analyze what we really want to pass on to our successors. To this end, an asset and business audit should be carried out in order to accurately identify the assets and succession risks. On the occasion it is worth to consider simplifying and ordering the corporate structure of your business.
- Who can you pass the business to?
It is extremely important to make a selection of future successors in advance, on whom the further development of the company will depend, and to properly prepare them for the role they are to play in the future.
- Family unity
The selection of successors and pointing the leader is one of the most difficult and responsible decisions. It is important to define the role and rights of other family members so that there are no conflicts in it and the company functions efficiently. Creating a family constitution can help.
- Lack of successors?
What to do if the natural successor is not interested in running a family business? In such a case, other options should be considered, e.g. sales to an external investor, buyout made by a management group not yet associated with the company and aimed at its acquisition and subsequent management (MBI - management buy-in), buyout by persons who have so far managed the company independently or in cooperation with a selected capital partner, e.g. a private equity fund, which becomes the owner of the largest block of shares (MBO - management buy-out) or retention of ownership without active participation in management.
- Order in legal matters
Organizing all legal issues before handing over business to successors will allow to focus on the company's development. To this end, matters related to inheritance should be regulated, whether based on the Polish legal system or by using regulations offered by other countries (e.g. private foundations, the use of trustee structures, etc.). It is also worth knowing before, what procedures the heirs will have to deal with inherited family property.
Ordering tax issues and correctness of tax settlements will allow for effective succession both on the part of the owner and the successors.
Organizing financial issues, including those related to external financing of the company and the structure of its debt, will greatly simplify the process of transferring a business to the successor.
Help in planning and conducting succession
Our team consists of experienced lawyers and tax advisors who provide comprehensive legal and tax support at every stage of the succession process. We offer our clients assistance in the following areas:
- audit of assets and family investments related to their transfer, also in the absence of an established succession plan or written will;
- audit of a business or company related to the identification of risks related to the death of the owner or prolonged inability to perform management duties;
- audit of the family structure including succession plans, including potential inheritance claims;
- audit of insurance or life policies regarding beneficiaries and procedures for launching payment of benefits;
- legal and tax verification of domestic or foreign solutions implemented so far in the field of family property management;
- preparation of a "succession plan" tailored to the individual needs and expectations of the senior, taking into account business and legal conditions of the business;
- implementation of a succession plan, aimed at providing in a safe and optimal manner, both from a legal and tax perspective, family property or an enterprise or selected components thereof, including by drawing up a will, family constitution, marriage contract (intercyses) or partnership agreement. Properly selected tools will be used to implement the adopted assumptions, as well as to secure the interests of those closest to the successor, including non-family members;
- restructuring of business operations under planned intergenerational succession (ie separation of private assets from company assets) ensuring the continuation of the company's operations in circumstances that cannot be predicted;
- legal and tax consultancy in the case of seeking an alternative path of succession (eg sales of an enterprise, MBI / MBO, preparation and giving opinions on draft contracts with external managers.