Business succession for micro-enterprises - early regulation secures the business and jobs

Anyone who has successfully built up their own company wants to preserve its continued existence, existing expertise, jobs and assets beyond retirement. Owners should therefore make arrangements for company succession at an early stage. In the event of an unexpected incapacity to work or the sudden death of the entrepreneur, there is a risk of a lack of management and liquidity problems as well as a dispute over the inheritance and high inheritance taxes without a regulated succession.

Family member as managing director or shareholder

There is often a desire for a family member to continue the business. Close relatives who have the necessary specialist knowledge and appropriate professional training can take over the business at shareholder and management level during the lifetime of the previous owner. Family members who do not meet these requirements can alternatively be included as shareholders and a competent person outside the family can become managing director. If the company is not to remain in family ownership but is nevertheless to be preserved, it can be sold to an investor, a proven senior employee or an external manager with extensive professional experience.

Gradual handover of the company to the successor

When a company is transferred from the previous owner to a family member, inheritance law, company law and tax law issues play a decisive role. A transfer during one's lifetime is often a (at least partial) gift. In the best case scenario, entrepreneurs can plan the transfer well and take advantage of inheritance and tax law benefits for the business assets. It is advisable for the transfer to take place gradually, for example through a gradual transfer of company shares. The previous entrepreneur supports the successor with the start and can withdraw further and further. Pension payments can also be made for personal security. It is important to structure the transfer carefully in order to avoid undesirable consequences. For example, there may be claims for a supplementary compulsory portion if not all heirs are included in the anticipated succession. This can be prevented under certain circumstances through personal communication and compulsory portion waiver agreements.

Entrepreneur's will regulates succession in the event of death

An entrepreneur's will, on the other hand, makes it possible to regulate the succession in the company only after death. Without a will, there is universal succession by the heir or heirs, which is generally not economically viable. In principle, GmbH and limited partnership shares are inheritable. A notary assists company owners in determining which heirs will actually become shareholders and advises on deviating regulations. The entrepreneur's will should definitely take into account the existing partnership agreements. The contracts should also be adapted to the will.

Healthcare proxy helps in the event of misfortune and illness

Every entrepreneur should also make provisions for misfortune and illness. A power of attorney then makes it possible to receive support from the authorized representative for health care as well as for property matters.

New legal regulations for GbR, KG and OHG

Since January 1, 2024, the share of a deceased partner in a civil law partnership (GbR) has also been transferred to their heirs, provided the partnership agreement does not provide for dissolution. This also applies to the death of a personally liable partner of a limited partnership (KG) or general partnership (OHG). An explicit provision to continue the company is therefore no longer absolutely necessary. However, it should also be specified here which beneficiaries are to be the new shareholders.

If you would like advice on this topic from a notary in advance, you can find it on the Internet at https://notar.de/ the right contact person. You can also visit the online consumer portal of the Chamber of Notaries at https://ratgeber-notar.de/.