Generational Succession of a Principal Shareholder Company Alive

Mikkel Bigum Hansen

Student thesis: Master thesis

Abstract

This thesis is written for the course Master of Science in Business Economics and Auditing at Copenhagen Business School.
The purpose of this thesis has been to study and analyze the different tax and legal opportunities surrounding the area of a generational change of a principal shareholder company and to create an overview of the rules and outline a roadmap for the process.
The primary objective has been to examine how the generational change is planned and implemented in the most favorable way, while the shareholder is still alive.
The thesis is based on relevant literature, legislation etc. and encompass a case study of the company Bigum Byg ApS, to illustrate the different solutions and choices.
The analysis is divided in to four main parts.
In the first part, the initial parts of the generational change is described, complete with a guideline to which points should be considered during this process, i.e. the needs and wishes of all parties and the goals, everyone has for the process.
In the second part, the different ways to value a company are analyzed, complete with background for the legislation and a description of how the different valuation opportunities is used and their pros and cons.
In the third part, different restructuring models are outlined. The different models are efficient to obtain different goals and therefore it is analyzed, in which situations the different models will be favorable.
The fourth part is an analysis of the generational change models relevant to the case study. The models analyzed is a gift handover of the company, an ordinary sale of the shares, fiscal succession and the A/Bā€model. The models are compared with regards to time horizon, taxation, the future operations and funding requirements.
All the above parts ends with a conclusion, related to the case study.
Then a concrete solution is outlined and on this basis, the conclusion of the thesis is described. The general conclusion is, that the optimal model depends on the actual situation related to wishes, funds available, family structure etc.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2016
Number of pages93