Selling your family business to a third party

For you as the selling entrepreneur, it is essential to understand how much you will need after selling your business. This applies whether the transfer is within the family or to a third party. To determine the required amount, we are pleased to prepare a Wealth Plan for you, taking all relevant aspects into account. Read more about Wealth Planning here.

Many clients have an extensive business structure with multiple entities. Is the structure suitable for a takeover? Will all activities be transferred, or will some remain? Will the real estate be included or retained (after signing an appropriate new lease)? What about my privacy after the sale? Sometimes the structure needs to be adjusted based on these considerations. This often requires a timeframe of at least three years before the sale can go ahead.

This refers to whether the business will be sold all at once, or whether capital (in the form of a subordinated loan or share capital) will remain in the company. Will the sale involve a “big bang”, with the entrepreneur stepping aside entirely, or will the selling entrepreneur be expected to remain active for a period? Is the sale price a fixed amount, or does it include an “earn-out”? It is important to think through these answers in advance. Not all preferred outcomes may be achievable, but they can certainly be part of the negotiation.

This is an important theme, and in practice it often receives too little attention. Awareness is essential. You can take measures even before the sale, such as fully adjusting the legal structure. We would be pleased to discuss this with you and your advisers. A few simple steps that may benefit you include:

• Give your holding company a different name from your business
• Do not register your holding company at your home address
• Ensure you are not the sole shareholder of the holding company

Discussing the sale of your business to a third party?