Follow-up and NextGen

Eventually, you want to pass your family business on to the next generation. This takes careful planning and implementation. We can help.

One in three

Only one in three family businesses survives the transfer from its founders to their children. You can increase your chances of continuity by discussing the succession carefully and in a timely manner with all stakeholders: your family members, plus your employees, clients, suppliers and bank.

How we can help you

Are you toying with the idea of transferring your company sometime down the road? It may be helpful to consider the following questions:

  • What do you want to be doing in five years? What will your enterprise look like in five years?
  • Does your enterprise have the optimal tax/legal structure for succession?
  • What will happen when you transfer your enterprise to your children?
  • How will you control your enterprise?
  • What would happen if you stopped tending to your business tomorrow?
  • What is the market value of your business?
  • What is the optimal tax structure for the proceeds from the sale of your enterprise?

The family charter

No succession without core values

There are many different types of family businesses, but they all feature three systems: the company, the shareholders and the family. When we talk about succession within family businesses, we don't just mean succession in the company's management or the transfer of shares to the next generation. For instance, there is also the issue of succession within the family. This form of succession is very difficult to plan and the death of a pater familias often has a major impact on dynamics within the family. Who will take over his role and is there support from the family?

Renate de Lange – tax partner and involved with many family businesses for PwC

Only one in three family businesses survives the transfer from founders to their children. In practice, we see that business-related governance is common within family businesses and has been becoming increasingly professional in recent years. More and more companies are voluntarily choosing to set up a Board of Commissioners which, on the one hand, serves as a sounding board for the family and directors and, on the other hand, monitors the interests of all stakeholders.

Families also tend to make arrangements with shareholders when it comes to dividend policy and conditions under which people can join or leave the company. However, in practice, families often tend to underestimate the importance of good governance.

How can you make sure your family members remain involved in the business and support the development towards responsible shareholdership? How do you talk to one another about assumptions and expectations that have gone unspoken thus far?

In this case, it is important for everyone to consider questions like: What are our core values? What keeps us together as (shareholders of) a family business? How do we teach our children to love the family business? What role do we see for in-law family members?  You must reach common ground about the answers to all these questions.

And setting up a family charter could play an important role in this. A family charter is not only about dividend policy and shareholdership. A family charter is actually about the core values of the family, what we think is important and how we treat one another and the business?

In this case, the document itself is not a goal in its own right. In order to reach common ground about such a document, the family is forced to talk about expectations and assumptions that may not have been properly addressed thus far. This is a very valuable and educational process for all stakeholders.

Contact us

Renate de Lange-Snijders

Partner, PwC Netherlands

Tel: +31 (0)88 792 39 58

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