07. What should happen to the business?

As an asset, the business creates value, dividends and a potential sale price. As a system, it depends on people, signatures, payroll, banks, contracts, clients, data and daily decisions. A share valuation answers only the first group of questions.

The succession review therefore begins with a 30-day founder-absence test. Who signs an urgent contract, instructs the accountant, ensures payroll, responds to a key client and obtains the information needed for a responsible decision? If the answer to every question remains one person, the system is vulnerable regardless of the business's value.

• critical actions during the first 24 hours;
• decisions required within 30 days;
• replacement or preparation of a role over a 12-month horizon;
• practical knowledge held only by the founder;
• the bank, service provider or company body that must recognise the authority.

Economic value determines who receives the benefit. Voting rights determine who exercises shareholder powers and decides reserved matters. Management determines who runs the company and represents it externally. One child may be the appropriate manager without that answering how value should be shared across the family.

The founder's role during the transition should also be described separately: operator, joint decision-maker, mentor, strategic leader or investor. Progressive support can transfer responsibility as readiness develops, but each stage needs a defined role and boundary.

Key point

Naming a successor is not enough: the successor's economic, corporate and operational position must be defined.

A successor's readiness depends on experience, authority, the team's confidence and a genuine knowledge-transfer plan. For children outside the business, the economic outcome, liquidity, timing and risk of an illiquid interest matter. Equal nominal value may leave one child carrying the management burden while another has no accessible cash.

Equalisation requires both valuation and funding. The family should not promise that ‘one child will receive the business and the others will receive cash’ until the value, funding source, payment date and stress scenario for a delayed transition have been defined.

Imagine a business worth €12 million that the eldest daughter is expected to continue, while two children remain outside it. The statement ‘she receives the business and the others receive equivalent cash’ requires at least four answers: which value is used, when it is fixed, where the cash comes from and what happens if profit or business value falls before payment is complete.

Funding may come from liquid family assets, insurance proceeds, dividends, a deferred claim against the successor or a staged buy-out. Each route affects the company's working capital, the parents' resilience and the children's risk differently. Family equalisation must therefore be modelled with the valuation, payment schedule and stress scenario before a specific amount is promised.

For example, with an illustrative business value of €14 million, the first 60%, or €8.4 million, could be modelled as €2 million of successor equity, €4 million of bank funding and a €2.4 million vendor loan. The remaining 40% would transfer later only if operating and debt milestones are met. This is not a transaction recommendation; it shows how a family promise becomes testable funding sources and stop conditions.

• valuation range and revaluation date;
• liquid assets outside the business;
• company payments that do not undermine resilience;
• security and maturity of a monetary claim;
• review on delay, a fall in value or a change of successor.

Key point

Fairness between children must be executable for both the family and the company.

Three events—unavailability, incapacity and death—are mapped against three horizons: 24 hours, 30 days and 12 months. For each cell, record the action, primary actor, alternate, authority source, evidence, institution, limitation and owner of the next step.

A director, shareholder, bank signatory, attorney and estate executor are not interchangeable. Even if their functions are currently concentrated in one owner-director, the continuity plan must show the lawful transition of each role.

Imagine that the founder owes a holding BV €480,000. The balance is below the separate €500,000 excessive-borrowing threshold, but there is no realistic repayment route, interest is merely capitalised and the company funds private expenditure. One number does not resolve this. The Box 2 threshold and the arm’s-length terms, actual payments and interests of the BV require separate reviews.

The debt does not disappear if the founder becomes unavailable or dies. The BV retains a claim against the founder or estate while the family must determine share value, the private estate and accessible liquidity. A rekening-courant, or current account, should likewise not conceal permanent financing without a term and schedule.

Before designing the transfer, bring every flow between the owner, tax partner and group companies into one overview. Each loan needs a purpose, balance, agreement, rate, actual payments, repayment source and security. The accountant, corporate lawyer and tax adviser then confirm their respective layers, while the family route shows what happens to the debt in each event.

Key point

The threshold, agreement and ledger entry do not replace one another: review the amount, terms, conduct and effect on family and company liquidity.

Imagine a family group worth €12 million: the operating business sits in a BV, property is held in a separate company and the eldest daughter already runs day-to-day operations. The phrase ‘transfer the business to our daughter’ does not yet define a transaction. The family could transfer the BV shares together with the company’s history, rights and liabilities; sell selected assets and contracts; or move management first and value and ownership later.

In an aandelenoverdracht, or share transfer, the shareholder changes while the company continues to own its assets, contracts and liabilities. In an activa-passivatransactie, or asset and liability transaction, the parties choose the perimeter, but each asset, contract, employee, permit and liability needs its own legal and operational transfer. A phased route may reduce the successor’s initial burden, but only if authority, price, finance, the founder’s role and a failure exit are defined in advance.

Choose the route before drafting the agreement or calculating tax. The family first decides who manages at each stage, what moves, which risks remain with the founder, how the buyer funds the price and what happens if the successor changes course or does not succeed. The valuer, civil-law notary, lawyer and tax adviser then confirm their parts of one coordinated sequence.

Key point

One family objective may require different legal routes. Compare control, perimeter, cash, risk and the fallback—not transaction labels.

Consider two professional calculations for one company. The first capitalises maintainable profit and produces €12 million. The second uses future free cash flows, reflects dependence on two clients and includes investment required immediately after closing—and produces €9 million. Neither is necessarily wrong. The gap may sit in assumptions, risk and the result that survives the founder’s departure.

The methods answer different questions. Intrinsieke waarde, or net asset value, examines accumulated assets and liabilities; rentabiliteitswaarde connects value to maintainable earnings; Discounted Cash Flow (DCF) uses future free cash flows; and a market multiple provides a comparability check. A useful range is tested against a second approach and exposes every material adjustment.

The next step is a bridge: enterprise value is adjusted for excess cash, bank debt and debt-like items to reach equity value. Even that is not the founder’s spendable cash. Part of the price may remain as a vendor loan or depend on performance through an earn-out. Valuation must therefore connect to transaction perimeter, payment schedule, the company’s operating reserve and the founder’s personal liquidity.

Key point

Do not select the highest figure. Show the assumptions, a second method and the bridge from business value to equity value and dated cash proceeds.

A gift or inheritance of a company can create tax before the family has cash with which to pay it. The Dutch gift-and-inheritance-tax business succession relief is called the bedrijfsopvolgingsregeling (BOR). It may reduce that tax for a qualifying active business. A separate income-tax roll-over, the doorschuifregeling (DSR), may move the tax claim on a qualifying substantial shareholding to the recipient and a later point. A roll-over means paying later; it does not make the tax disappear.

Both measures depend on the facts. The review must establish which assets are genuinely used in an active business, how long the transferor has owned them, who will continue the business, what the company is worth and exactly what is being transferred. Investments and rental property cannot automatically be treated as active-business assets.

Only then should the articles of association, shareholders' agreement, company resolutions, shareholder register, bank authorities, will, Dutch living will (levenstestament), insurance and any share-administration foundation (stichting administratiekantoor, or STAK) be brought into one executable set. The family designs a workable transition first; the tax adviser then confirms whether either tax measure is available.

A family may see a single group worth €18 million. Inside it may be an operating company, an investment portfolio, rental property and cash reserves. For BOR purposes, the decisive starting point is neither the holding label nor the total price, but the function of each asset: whether it is genuinely used in an active business or remains investment property—beleggingsvermogen.

Cash needs particular attention. Money reserved for an evidenced acquisition or a new production site may perform a business function. Permanently surplus cash—duurzaam overtollige liquiditeiten—normally raises a different question. A management label is not evidence: the amount, decision, timing, counterparty or project and later execution should be recorded.

Key point

Map assets, liabilities and the purpose of cash first; only then should a specialist calculate the potential BOR perimeter.

Where an operating company sits below a holding company, the review follows the full ownership chain. For every subsidiary, record the percentage, acquisition date, activity, assets, liabilities and structural changes. Active management by the holding company does not by itself turn a subsidiary's investment asset into an active business.

Rental property is where everyday intuition most often fails. One hundred properties, a large team and a busy owner do not replace the legal test. Development, transformation and substantial services are separated from ordinary third-party rental. High returns are also divided between market growth, leverage and work: debt can increase the return on equity without creating an active business.

The general starting point is at least one year of prior ownership before an inheritance and five years before a gift. Asking only how long the holding company has existed is not enough. A newly acquired subsidiary, an increased percentage, a share buy-back, a demerger or a marital-property change may start a separate clock for part of the interest.

Imagine that a founder held 30% for many years and acquired the remaining 70% six months before death. The full interest cannot automatically be given one date. The map therefore shows the capital history and every distinct business line; restructuring exceptions are confirmed before the transaction, not after it.

For transfers from 1 January 2025, the general continuation period is three years; earlier transfers must be tested under their applicable rules. A sale, share redemption, admission of a new participant, partial cessation or restructuring during that period may affect all or part of the relief.

A strong sale offer after twenty months therefore cannot be assessed by price alone. The family compares price, possible clawback, income tax, contractual restrictions and cash after closing. A proposed change first enters the event log and specialist review; where a breach occurs, separate notification rules apply, with the current public guidance generally referring to an eight-month period.

A marital agreement, community property, will and estate distribution determine who actually receives shares, a business or only a cash claim. A Dutch final equalisation clause—finaal verrekenbeding—may connect the surviving spouse to business value, but it does not turn that claim into shares or decide who manages the company.

If one spouse owns a business worth 100 and the other owns cash of 60, an equalisation as if there were community property may create a claim of 20. If the other spouse instead owns cash of 160, no claim against the business owner arises. The same clause creates a different result because the asset mix differs; Product 07 must therefore be reconciled with the ownership and estate route before tax is calculated.