This master thesis has been written as part of the MSc in Business Economics and Auditing programme at Copenhagen Business School. The main objective of this thesis is to create clarity about the options and legal basis for generational succession to auditors so they are able to provide the best possible advice to their clients. The topic of this master thesis is generational succession of a personally owned and run enterprise within the family. This includes answering the following problem formulation: • What are the options for generational succession of a personally owned and run enterprise so the generational succession will happen optimally in a tax point of view? o What considerations should be made before the planning of a generational succession and the completion of the generational succession itself? o How can an enterprise/a company as part of a generational succession be valued? o What models can be used in a generational succession of a personally owned and run enterprise and what legal effects do the individual models have for the involved parties? The answering of the problem formulation above will be based on an analysis of the legal basis for generational succession. Initially it is important to consider a number of considerations before you start to plan and initiate a generational succession within the family. A generational succession should therefore not only consider a single party but it should instead consider both the older generation, the younger generation and the actual business so the generational succession will be a success for everyone involved. This includes the consideration of future earnings, future increases in value and the tax-related impacts of a generational succession. Valuation of an enterprise/a company as part of a generational succession within the family can be a complicated task. A key issue in connection with generational succession within the family is the valuation of the transferred assets of the involved parties which is important for the determination of the tax profits reported to SKAT. The parties do namely have a common interest in that the handover will trigger as little taxation as possible. Valuation of the transferred assets or shares as part of a generational succession should in general be valued in accordance with the market value. SKAT has however issued some guiding directions for valuation of assets and unlisted shares to use when it’s not possible to determine the market value otherwise. There are many different models for generational succession of a personally owned and run enterprise but in practice it is especially relevant to use generational succession and restructuring models that are based on a succession principle as this will usually result in the tax-optimal solution for the involved parties in a generational succession. The generational succession and restructuring models corporate restructuring, transfer of shares by succession after ABL § 34, share exchange, transfer of assets, demerger and issue of new shares with advance dividend (the A/B-model) are analyzed in this thesis with regard to the options, the conditions of use and legal consequences for the parties involved. The choice of a generational succession and restructuring model should always depend on the given situation to ensure that a generational succession will minimize the tax payment under the given conditions.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||94|