Generationsskifte af Biler A/S: En enkes perspektiv

Winnie Guldberg Scheel & Michael Holmer Nielsen

Student thesis: Master thesis

Abstract

The key to a successful company ownership transition is thorough planning. However, it is often seen that a company facing an ownership transition, has not been planned. There are a lot of possible reasons for this; however a sudden death in the family is a frequent reason. This thesis is based on a situation with an unexpected death of a majority shareholder, where no consideration of the company’s transition to the next generation, has taken place. The problem statement of the thesis is as follows: ”How can an ownership transition be implemented on Biler A/S, in a way where the widows future financial needs as well as the family’s continued ownership is taken into consideration, but also insures the company the best possible base for future growth?” In order to solve the above statement, it is important to take all circumstances regarding the family into account, as well as the circumstances regarding the company in close connection with the outside world. Therefore, an advisor is an important sparring partner. When a death happens, the family often needs help getting an overview of the situation, unless a plan concerning the ownership transition of the company, has already been drafted. A company can represent substantial value as well as have sentimental value for members of the family, which can make the transition of an estate essential. This combined with the legal possibilities and constraints can make it almost impossible without an advisor as a sparring partner. There are a number of ways to prepare an ownership transfer, when the owner is still alive. Models to restructure the group, can ensure a smoother transition and ensure that the company has a continued operation through a deferral of taxes. With a transfer of unlisted shares in connection with the ownership transition, the estimated value will be an essential element, as the value will have an effect on how high a tax the authorities will receive in connection with the transition. In Danish law, there are currently 3 different methods to estimate the value of unlisted shares. The methods often estimate a significant difference in value, compared to each other. The different values makes it interesting for the parties involved to see which model can be used for the transition. In this thesis, one of the methods estimated a negative value. In accordance to Danish tax law, a transition must have a value. A second estimates a low value under DKK 1 million, while the calculation after the Discounted Cash Flow method produces a value of DKK 51 million. We have suggested two possible solutions, one is a sale to a third party and the other an ownership transition to the family. The sale to the third party can be done either privately or through a holding company. Currently the shares are owned by the widower privately, where a sale will result in tax on the profit. However if she chooses the solution of making a tax free exchange of shares, the shares can be sold tax free after a period of 3 years. Furthermore, it may be an advantage to transfer a part of the shares to the children before a sale. If the company is transferred to the family, it will be tax free. After the transfer it will be highly advantages to restructure the company group to adjust to the current owner structure. Also the company’s continued operations should be taken into account. Currently the family does not have the skills to run the company, therefore a company structure, including the two executive employees as part of the owners, would be ideal. One of these employees will also be the daily leader of the company. At the end of the thesis, we have compared the solutions as well as the advantages and disadvantages of each solution. Ultimately, we leave it up to the family to decide which solution is best for them.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages184