However, with the death of the owner, the company continued to exist. Anyone who thinks about company succession at an early stage can ensure that their company will continue to be successful after their own death.
If a successor was found in the family, owners have two possibilitiesto pass on the business free of charge: on the one hand through an inheritance, on the other hand through a gift, also known as anticipated succession (external link). In the following article you can read why it makes sense to transfer the business start-up during your lifetime and what founders have to pay attention to.
Definition: What is anticipated succession in the context of corporate succession
In the case of anticipated inheritance or donation is still to lifetimes of the entrepreneur transfers the founding of the company free of charge to one or more family members by means of a donation agreement.
Preparing for corporate succession: Why making a gift during your lifetime makes sense
The earlier owners start with the company succession, the better. After all, it often happens that business owners miss the timely transfer, for example due to an accident or serious illness. the Consequence: Owners cannot fully plan the business succession and succession by statutory inheritance comes into effect, causing the owner to lose influence over the business. It is therefore important to start early and to regulate what should happen to the company after death. In this way, owners can still intervene if necessary and have the opportunity to actively prepare for the generational change.
Another advantage of the donation relates to the topic Steer. Those who pass on their wealth during their lifetime can reduce their tax burden through gradual donations. Although the amount of tax for gifts and inheritances is almost the same, the exemption can be claimed for gifts every ten years. In the case of an inheritance, this is only possible once. More company shares can thus be passed on tax-free through donations than through a will.
In addition, a gift during one’s lifetime offers the opportunity to donate early for clear conditions and to prevent a later inheritance dispute. After all, disagreements among the heirs can lead to premature termination of the business if they do not come to an agreement.
Owners should be aware that if the business is transferred free of charge in the event of inheritance, other relatives may be entitled to a supplementary compulsory portion (external link). Because according to the law, the descendants of the deceased, his parents and his spouse are responsible certain part of starting a business after the owner’s death.
In order to act for the benefit of the company and to avoid disputes among the heirs, owners should tackle the company succession in good time and following documents make:
- donation contract
- contract of inheritance
Even company owners who want to regulate the company succession through a donation or through the anticipated succession and who may have already started the preparations, it makes sense to also take precautions for the event of inheritance, if this should occur beforehand.
An essential document that must not be missing here is the will. This can be handwritten and is also valid without a notary or lawyer. Holders can amend and rewrite the will at any time. The assets remain in the possession of the owner until their death.
A community of heirs with several heirs should be avoided if possible. Because trouble is often inevitable here. And the success of the company can then no longer be guaranteed.
Owners who want to give away their company during their lifetime must draw up what is known as a gift agreement. Important here are contractual rights of withdrawal, which allow holders to reverse the donation if necessary.
When creating the donation contract, owners should ensure that it is complete. The following points should not be missing in the contract:
- Details of both parties (names, place of residence and date of birth), details of the gift item
- a promise of donation by the giver and acceptance by the recipient
- Right of withdrawal and revocation
- possible donation conditions
contract of inheritance
The inheritance contract has the advantage over the will that all parties involved must have agreed to the inheritance contract. Later disputes in the family are more likely to be excluded than in the case of a one-sided will. Here, too, the owner has a reassuring feeling, as he can be sure that his company will be in safe hands after his death.
Tackle company succession with the help of business start-up advice
Preparing for a company succession takes a lot of time. In addition, when preparing the successor some points to be considered. For example, owners must ask themselves the question of a gift or inheritance. A suitable successor for founding the company must also be found. In addition, it must be checked whether the existing legal form is also suitable for succession or whether another company form should be chosen in order to maintain the start-up in the long term. Owners should clarify these points as part of a business start-up consultation. A consultant knows his stuff and can prepare the owner for a company succession in the best possible way.
Such advice can even be subsidized by the state. Company successors who want to take over a company should also seek expert advice in order to be on the safe side and avoid initial mistakes (service tip: search for a consultant).