Succession of generations for a trading partnership
Read here about what to consider when your share is transferred to a new owner by gift, inheritance or will.
It is called a transfer of beneficial ownership when your share is transferred to a new owner by gift, inheritance or will. This information is for people who are, for example, donors or parties to an estate.
Regarding gifts
- A transfer is a gift if
- you give away your shares without receiving anything in return
- there is a gift intention
- it is voluntary
- the gift has been handed over.
Regarding inheritance and wills
- If a partner in a company dies, the company must normally be liquidated. Read more under Liquidation.
- The company need not be liquidated if
- the partners have stipulated in the partnership agreement that an heir shall become a partner.
- the other partners and the heir agree that the heir shall become a partner.
As a party to an estate, you are responsible for assets and debts and for accounting for taxes and fees until the estate is distributed. The estate is distributed when the parties have divided the assets among themselves. If you are the sole party, the estate will have been registered when the Tax Agency has registered the inventory of estate.
The generational succession presents many challenges
- Involve the whole family in the change of ownership so that everyone has a say.
- The person who will take over management needs appropriate training. Working in another company for a while can provide valuable experience.
- Let the next generation get to know the different parts of the family business before taking over, for example through a trainee programme. A mentor, who is not a member of the family, can also be very helpful.
- Distinguish between ownership and operational management. Interested children may well take over part of the ownership, without taking operational positions in the management of the business.
- If you remain in the business after the change of ownership, it is important that you can interact constructively with your children in their new roles as owners and/or managers.
The Bereavement Guide
From: Swedish Agency for Economic and Regional Growth