It is an often overlooked fact that 70% of the business successions and collaborations fail. Business successions and collaborations in which people develop new relationships and change roles, and, as a result, their perspective, require a flexible approach. This is why a legal quick fix is not a lasting solution and may become restrictive, giving rise to disputes between the stakeholders. As a consequence, the promised tax advantages, if any, will often not be achieved either.
The art is to support the process, put out fires, and outline a perspective that everyone is happy with. This is not top-down advice from a senior businessman, shareholder, or director, but constructive advice that is the result of a process that brings together different perspectives. If this is not done carefully, the final structure will be filled with flaws.
Read more: Closely held business, collaboration and continuity.
Intermediate legal forms
Intermediate legal forms can be useful over time, such as the creation of (tax friendly) participation schemes that enable stakeholders to develop their business skills. Younger generations must be prepared for responsibilities and opportunities before legal structures are implemented.
Family business: Culture of trust and cohesion
If the successor is a member of the family, the perspectives are even more complex. Expectations, emotions, uncertainties often have their source in the family's history and are not easy to pinpoint. Creating a culture of trust and cohesion is a prerequisite for a lasting succession. An independent adviser who is able to see several perspectives can be a major contributing asset.
Read more: Family business and succession.
See also the Solution on Private Foundations, which can create a solid base especially for family businesses by providing a structure that helps improve trust, create a joint vision, and prepare the younger generation; all key conditions for lasting continuity.