Generational Ownership Transfer

Heidi Westergaard

Student thesis: Master thesis

Abstract

This thesis will go through the laws and rules of generational ownership transfer. This analysis will use the rules and laws to examine how a generational ownership transfer is cheapest for both the person who is handing over his company and for the person who is receiving the company. The analysis looks at both taxation and the economic consequences of the generational ownership transfer, To check how a generational ownership transfer is cheapest for both the person, who is handing over his company and the person who is achieving the company. The analysis will be made of both a personal owned business and a stock company. The analysis shows which generational ownership transfer model, will be the best, according to taxation and economic consequences, for both parties in the generational ownership transfer. To check the valuation of the business/company, the thesis will go through the valuation model DCF (Discounted Cash Flow). The DCF-model analyses the expected value of the company, through an analysis of the future expected growth in the business/company.
The thesis is made on basis from a case-business, called Andersen Diamantboring. Which is a personal owned business, owned by Anders Andersen. He wants to make a generational ownership transfer to his daughter Emma Andersen. Therefor there will be an analysis of which generational ownership transfer model there will be the best for both Anders Andersen and Emma Andersen. To check if there will be a better generational ownership transfer model, the personally owned business will in theory be converted to a stock company, called Andersen Diamantboring A/S. The stock company will also be analyzed to see which generational ownership transfer model will be the best for both Anders Andersen and Emma Andersen. Both the personally owned business and the stock company will be analyzed with both a generational ownership transfer, where there will be taxation. They will also be analyzed according to the principals of succession.
The conclusion of the analysis of both Andersen Diamantboring and Andersen Diamantboring A/Sis that there will be no direct answer, it depends on Anders Andersen and Emma Andersen’s economic situation before and after the generational ownership transfer. So there will be two conclusions on how to make a generational ownership transfer. One where Anders Andersen will give the business to Emma Andersen. And one where Emma Andersen will pay for the business.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2020
Number of pages84