Family business succession requires planning that combines civil, commercial and fiscal mechanisms. This is one of the main conclusions taken from a conference on family business succession held at the Universitat Internacional de Catalunya, organised by the UIC Barcelona Bosch Aymerich Family Business Chair, the Catalan Association of Family Businesses (ASCEF) and the Catalan Association of Specialists in Succession Law (ACEDS).
Different succession experts addressed the main challenges faced by family enterprises, which currently represent 88.3 % of all private companies in Catalonia, contribute 69% of the gross value added (GVA) and generate 76% of jobs in private companies. Some of the topics discussed during the conference include the importance of successful succession planning; the fiscal considerations involved in the handover; corporate governance bodies and the importance of legal certainty.
During the first round table focusing on the challenges of succession, the director of the Bosch Aymerich Family Business Chair, Jordi de Juan, highlighted the importance of combining the different instruments involved in planning family business succession: "All commercial, civil and fiscal considerations must be taken into account in order to respond to the problems posed by the handover of a family business". De Juan also outlined the problem of tax litigation faced by family businesses and highlighted the research carried out by the Chair on the question of unconstitutionality of Royal Decree Law 3/2016 in relation to the 2016 Corporate Tax reform, a fact that could lead to companies saving over €5,000 million in tax.
University of Barcelona lecturer Josep Maria Cervera then described the main aspects that an optimal succession plan should include and highlighted the issue of talent management within a family business, given that "families must find a balance between their needs and those of the business through a plan that aims for meritocracy".
On the other hand, ACEDS president Ramon Pratdesaba stated that Catalan law focuses on the "continuity of the productive unit over and above the equality of the successors", thus emphasising the fact that the business continues "even if the family’s interests do not coincide".
The conference was closed with a second tax consultancy expert panel, who addressed the challenges surrounding the legal safety of family businesses. Crowe partner Ramon Santos gave a presentation on the importance of anticipating succession during the life of the company, pointing out that "it offers peace of mind to the owner, the heirs and the employees". He also reiterated that it is essential to have a "holistic view of the succession process", with a special focus on taxation.
Founding partner of Ebrat Abogados, Alejandro Ebrat, highlighted a series of tax planning strategies, emphasising the decoupling of family businesses from family wealth. CIM Tax & Legal partner and ACEDS Tax Committee coordinator Emma Sánchez Corretger also stressed how regulations need to be reviewed constantly in order to adapt to changes.
President of the ASCEF, Amadeu Jori, closed the conference by stressing the importance of planning succession well, the taxation aspects derived from the handover, the corporate governance bodies involved and the importance of legal security, all "vital issues that determine the survival of a family business", he concluded.
More than 80 business representatives attended the Universitat Internacional de Catalunya in person for the event organised by the Bosch Aymerich Family Business Chair.
