Family business succession:
plan early, hand over well

Every owner knows they will hand over one day; few prepare in time. Yet the issues that determine the quality of a succession take years: reducing the company’s reliance on its owner, putting the accounts and governance in order, deciding what happens to the property held within the company and, above all, answering the central question — who takes over? One of your children, but which one, and on what terms for the others? A trusted manager, but with what equity contribution? A third party, but which one will preserve what you have built? These wealth and tax issues are intertwined with a family and human dimension that, if handled badly, costs more than any tax bill.

The classic mistake is to start with the instruments. The right order is the reverse: first the project — who takes over, what role you keep, how much liquidity you really need — then the tools that serve it. The range is wide: a lifetime gift-sharing arrangement (donation-partage, under French law), possibly with an equalisation payment (soulte) to balance things between the children who take over and those who do not; the Dutreil pact (pacte Dutreil), the French collective share-retention undertaking that very significantly reduces the tax cost of a family succession — and which is structured upfront with your tax advisers, never in a rush; the OBO (owner buy-out), which lets you turn part of your business assets into cash while staying in charge; and a sale to a manager or a third party, outright or phased. In practice, the best successions often combine several of these building blocks.

We start by setting a reference business valuation — the foundation of any discussion, within the family or not — then map out the possible scenarios, with figures: for each one, your net proceeds, the resulting governance, the timetable and the points to watch. We then work hand in hand with your lawyer, your notary (notaire) and your chartered accountant — we do not replace your tax and legal advisers; we bring everyone together around the chosen structure, in your interest and on your timetable. If the route involves an outside buyer, our sourcing comes into play to identify and approach the right candidates in complete confidence. And because a family succession is decided as much around the kitchen table as in the legal documents, we can, if you wish, run the meetings where everyone — those taking over and those who are not — understands the structure, the figures and their place. The successions that last are the ones everyone has understood.