IS THERE LIFE AFTER DEATH?

19/10/2021

This question has fascinated entire populations for centuries and we will not be able to answer it for you.  What we will give you, however, is guidance on how to plan the continuity of  your business after you have ceased to be an entrepreneur.

In recent times we have been confronted more than once with the consequences of the unexpected death of a company owner . These consequences were far-reaching for the immediate family, but also for the company. Entrepreneurs consider succession to be an important issue, yet practice has shown that many matters are inadequately arranged in the event of the unexpected passing.

Who gets the shares and who takes over the management? How can we prevent the bank from blocking the accounts until there is clarity about ownership and succession? Who will keep the staff, customers and suppliers calm? When these matters are not properly arranged, this can even affect the continuity and the company might not survive the loss of its owner.

If it has not been established who your successor is as a director, your heirs will have to appoint him or her. This is a crucial task for which they are often unprepared, and it is also difficult to make rational decisions during the grieving process. Furthermore, disagreements between the new shareholders or a delay in the issue of the deed of succession, more often than not, creates a gap in the management of the company. It is, therefore, not only important to clearly establish who inherits the shares in the company, but also crucial to decide who immediately takes over the management. Obviously, this person or these persons will have to be prepared for their task. Too often it appears that the company owner does not share important information about the course of events in the company with family and/or employees with serious repercussions.

The law states that your heirs must pay tax on the inheritance. However, if you have correctly arranged for one or more of your heirs to continue the business, they can make use of the business succession scheme. In that case they pay no or less tax on this part of the inheritance. The same applies to the income tax that your heirs have to pay on the value of your company’s shares, among other things. With the right structure you can avoid paying too much.

The legal rules have changed drastically in recent years. Have you put your business and your will in order to ensure the continuity of your company and to make good use of the (tax) regulations that currently apply?

Would you like to know more? Feel free to contact us for more information or make an appointment for a personal meeting with one of our trusted advisors.

Erik van Toor
Erik van Toor

""Where there is a will, there is a way""

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