Transferring the family business to four children
The founder wanted to transfer the family business to his family members, but was concerned about what might happen if a family member ran into financial problems or wanted to sell their share of the family business. The founder also wanted to make sure that a non-immediate family member could never become a shareholder in the family enterprise.
Keeping it in the family
We helped our client create a step-by-step succession strategy, including considerations to ensure the return of a family member’s shares to the founder in the case of personal bankruptcy or other financial stress. We also advised on the creation of new articles of association for the company, including special provisions preventing the transfer of shares to non-family members without the consent of the other shareholders.
Sudden death of founder without succession plan
The chairman and CEO of a family business was its sole shareholder, but he died without a succession plan in place. Left as it was, his estate would have been liable for extremely high inheritance taxes — and created ownership and management issues that none of the stakeholders were willing to manage.
From one, many
We presented several options to the family members, laying out the tax consequences of each one. In the end, the surviving spouse and her children decided to spin off the company’s largest division and sell other business assets. This strategy resulted in the family retaining a less complex and manageable business that preserved their legacy and minimized transfer taxes. As part of the overall plan, we also helped the family create trusts for future generations, as well as charitable foundations so that the family was able to continue its support of their community.