A generational change is a comprehensive process in which many considerations and legal areas must be included to find the best solution for the individual company. CLEMENS Law Firm has in-depth experience with all aspects of a generational change. We can therefore guide you safely through the process from initial consideration to execution.

When the company is to be transferred to a new owner, consideration for both the company and the owner’s wishes for the future play a crucial role. In addition, taxes and dues are very important compared to the need for financing.

Many legal areas are involved in a generational change process and will often include:

  • Taxes and dues
  • Valuation rules and guidelines
  • Family and inheritance law issues, including wills
  • Corporate law matters, including opportunities in relation to differentiating influence, finances, and ownership shares
  • Financial aspects
  • Restructuring, including e.g. separation of activities prior to generational change.

Several of these legal areas are constantly changing. This applies not least to the taxes and dues framework and practice for valuation, where the political winds have also given rise to major changes of direction in recent years.

Practice regarding the use of various generational change models is therefore constantly evolving, and conditions are constantly changing. This applies for example in relation to models containing tax deferral under the rules for fiscal succession, where particularly the so-called money bin rule is often the central point. Similarly, this applies to models with focus on financing facilities, including the A/B model, where advance right to distribution of dividends for the older generation is used to facilitate the buyer’s financing needs.

Coherent and holistic advice

We provide coherent advice within all legal aspects of the process based on our many years of experience with and updated insight into the relevant rules and practices.

We therefore offer you:

  1. Proper planning of your generational change
  2. Choice of model subject to all relevant considerations
  3. Minimal impact on the company’s operations during the process
  4. Security during and overview of the process.

Coherent advice covering all relevant aspects ensures that the most appropriate generational change model is based on the parties’ specific requests. In addition, the planning may reflect the wishes for pace, any successive transfers, escalation of influence, etc. And with our extensive experience in designing the legal basis for the overall process, we help ensure that the plans are implemented in accordance with the wishes and considerations for the generational change.

This may e.g. be generational change agreements regarding transfer of shares in the company. It may also be situations where various structural changes must be implemented, to which all parties must contribute as part of a generational change.

A generational change is often a complex process, and if inexpedient choices are made or if technical errors occur, the consequences may be enormous for the individuals involved as well as the company’s future. We are also sometimes asked to assist in matters where a generational change went wrong because tax rules were overlooked or misinterpreted. In such instances, it is our task to mend or mitigate the negative consequences.

Are you contemplating a generational change of your company?

If the time for a generational change approaches, it is very important to be aware of the various possibilities and requirements which e.g. concern taxes and duties.

We know the rules and are obviously ready to guide you throughout the process. We make sure you define the right strategy and proper execution that suits your business. Feel free to contact us for a non-binding discussion of the future plans for your company.