How can I protect myself from legal risks in a company succession?
January 25, 2022 | 30,00 EUR | answered by Chloé Schmitt
Dear lawyer,
I am currently facing the challenge of passing on my family business to my son and I am wondering how I can protect myself from legal risks in the succession of the company. My son has already gained experience in the business and is ready to take on the responsibility. However, I am concerned that there may be legal issues that could jeopardize the succession.
The current state of my company is stable and well-positioned, but I want to ensure that the handover goes smoothly and that my son can successfully continue the business. I have already had some discussions with my tax advisor, but I still lack the necessary legal knowledge to identify and avoid potential risks.
My concerns mainly lie in the possibility of disputes within the family when it comes to the distribution of the company's assets, or in potential legal disputes with creditors or business partners. I want to ensure that my son and the company are as well-protected as possible.
My question to you as an experienced lawyer in corporate law is therefore: What measures can I take to protect myself and my company from legal risks in the context of business succession? Are there specific contracts or agreements that I should make to ensure a smooth transition?
I thank you in advance for your support and expertise in this important matter.
Best regards,
Hans Ziegler
Dear Mr. Ziegler,
Thank you for your inquiry regarding the succession planning in your family business. It is understandable that you have concerns about potential legal risks and want to ensure a smooth transition. As an experienced attorney specializing in corporate law, I can recommend some measures to protect yourself and your company from potential legal problems.
First and foremost, it is important to start planning the succession of your business early. A well-thought-out and structured preparation is crucial to minimize risks. It is advisable to work with your son to create a clear and binding succession plan that covers all relevant aspects such as company structure, financial situation, and management.
It may be helpful to establish specific contracts and agreements to facilitate the transition. These may include shareholder agreements defining the rights and obligations of shareholders, as well as succession agreements governing the transfer of the business. These contracts can also include provisions for asset distribution and conflict resolution to prevent disputes within the family.
Furthermore, it is advisable to seek legal advice to identify and minimize potential risks. An experienced attorney can help you consider all legal aspects of the business succession and take the necessary steps to protect your company and your son.
In summary, I recommend starting the planning of the business succession early, establishing specific contracts and agreements, and seeking legal advice to minimize potential risks. With careful preparation and professional support, you can ensure a smooth and successful transition.
I hope that my recommendations will assist you in the succession planning and I am available for any further questions.
Sincerely,
Chloé Schmitt
Corporate Law Attorney
