The family started the business in the 1990s and is now one of the market leaders in its field. The first entrepreneurial generation is beginning to decide which of the offspring will take the reins and continue the family business.
The intergenerational handover process tends to be very individual. It depends on many factors, and it is almost always a long-term process where the new generation has to become familiar with many things. It all starts with the most important decision – to hand over and take over the family business, which is accompanied by many discussions, obstacles, but also happy moments.
We stepped in at this stage with the client and used our several years of experience in the field of intergenerational handover, including an experienced team of senior experts covering a wide range of expertise and reliability, to find the most suitable solution that would suit the client and correspond to the beneficial future development of the company. The fundamental document we rely on in intergenerational handover is the Family Constitution. This precisely deﬁnes the deﬁnition of the family’s core values, particularly in relation to the ownership of the family ﬁrm, as well as the vision of the business family in terms of their joint future development. The family constitution is followed by further steps, whether in the form of an agreement of the partners or shareholders of the family ﬁrm, a will or the establishment of a trust.
The first thing to do was to map out the different areas:
- Restructuring the company to make it run more clearly and protect it in the event of an accident.
- preparing the company for an intergenerational handover
- possible development of other / additional business activities
- protection of family assets
The expected results of the changes are:
- trust and prevention of family breakdowns
- cleaning up family relationships (ﬁrm owners know who in the family is an owner, who sits on the management or supervisory board and who is entitled to a share of the profits)
- protection of family assets and elimination of business risks
- ensuring the management of the ﬁrm by establishing succession rules, both for the sons and daughters of the ‘founding father’ and for their descendants, so that the ﬁrm will operate for decades or centuries
In the above example, we have tried to approximate a model situation of intergenerational turnover from the initial state to the desired solution. The reasons for intergenerational handover can be many – from health, to burnout syndrome, to the desire to pursue other activities at a given age. However, there may be situations where it is not possible to pass the company on to certain family members and the transfer of the business to external management or the use of trusts or the eventual sale of the company is addressed.
Partner Marek Švehlík says: “We are not just attorneys, we run the firm ourselves with a reference to the future generation.”