Anticipating and preparing for company transmission

Verified 14 November 2023 - Legal and Administrative Information Directorate (Prime Minister)

Giving up your company is an act of management that cannot be improvised. Uncontrolled transmission is a risk to its human and financial equilibrium. It is therefore essential to anticipate transmission to get the best price and ensure the business's sustainability.

The personal balance sheet is the first step in the lengthy process that will lead you to the transmission of your company.

It consists of a global reflection on your project and your deep motivations, in the short and medium term.

The personal balance sheet allows you to question you :

  • What reasons encourage you to give up your company: retirement, health or family problems, opportunity for significant added value?
  • When and to who would you prefer to pass on your company: a family member, an employee, a former apprentice or an outside candidate?
  • What objectives will you continue after transmission: professional retraining, resumption of a company, volunteering?
  • What constraints hinder its realization: keeping the spouse in the company, financial difficulties of the company, impact on your income?

Once done, this review will allow you toconfidently starting negotiations with potential buyers company.

The transmission of a company, whether for consideration (assignment) or free of charge (donation), can have serious consequences on the plan financial, social and psychological.

It is therefore crucial for the head of company to have a clear vision of his situation before engaging in the transmission process.

Tableau - Consequences of the company transfer for the seller

Financial

Social

Psychological

Benefits

  • Gain from disposal
  • Capital injection for the resumption of another activity
  • Tax advantage for capital gains
  • Lifestyle change
  • Availability for family and leisure
  • Reduced stress
  • Improving quality of life

Disadvantages

  • Individual business Receivership period if sale of a
  • Breaking with the business environment
  • Possible isolation
  • Search for paid employment
  • Emotional emptiness
  • Difficulty finding a center of interest
  • Difficulty reintegrating into family life

A transmission that is not anticipated with sufficient relapse may to undermine the good continuity of the company, or even make it impossible.

The design of a transmission schedule consists of organizing upstream (5 years in advance in the ideal case) the various construction sites to be implemented until the transfer or actual donation of the company:

It is also recommended that you a balance sheet, 18 to 24 months before transmission to reorganize its assets and prepare for new investments.

This balance sheet is an inventory of the assets of the head of company: personal real estate, rental investments, life insurance products, securities, cash and loans in progress (or other liabilities).

Please note

Alongside this timetable, the Head of company must continue to develop individual business his or her business not to cause a decrease in its value before its actual transmission.

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