Atlas | Business Succession
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Business Succession

As the population ages more and more, business succession is increasingly becoming a topical issue. A time will come when you wish to enjoy your well-earned retirement and pass on your business to your children, an employee, or a third party.

 

Various possibilities exist for giving shape to a business transfer. For example, if a business is conducted by a company, the transfer might involve some or all of the shares in that company, or the company’s assets and liabilities. Another possibility is to set up a holding structure, in which the holding company, rather than you yourself, disposes of the shares in the operating company. Each of these transfers has completely different tax implications.
A single non-variable selling price might be negotiated for the business transfer, or alternatively that price might be made contingent, in whole or in part, on future income from the business acquired. In some cases the buyer can use equity to pay the entire purchase price immediately, in other cases part of the price is recorded as a debt to the seller or financed using a loan.

 

The Tax Partners at ATLAS will gladly explain the various possibilities and their tax implications, whether you wish to sell a business or plan to acquire one. In the latter case, it might be advisable to have due diligence performed: you will want to know exactly what you are buying. This includes an analysis of the tax position of the target business. You will likely also want to determine (as will the seller) what value can be attributed to the business. The Accountancy Partners at ATLAS can prepare a valuation report for you to that end.