Family business transfer: how to get it right

Starting only when the transfer date is close means making decisions under time pressure. A better approach is to first document what actually needs to be transferred: ownership, control, responsibilities, relationships, working arrangements and business-critical knowledge.

Family business transfer: what needs to be clear first?

Start with four questions.

• Who becomes the legal owner, and when?
• Who takes over day-to-day management?
• How will the business be valued and financed?
• Which knowledge, authorities and relationships still depend on one person?

That last question is often underestimated. A business can be legally transferred correctly while the successor still depends on the departing owner for pricing agreements, customer exceptions, supplier contacts, passwords, contract history or decisions that were never documented.

That is why knowledge retention belongs in the same plan as the legal and financial transfer, not at the end of the process.

BOR: check the current conditions

When a business is gifted or inherited, the business succession scheme (BOR) may be relevant. The Dutch Tax Administration describes the BOR as a possible exemption from gift or inheritance tax when the conditions are met.

According to the current information from the Dutch Tax Administration, it must concern an active business; investment assets are not automatically covered by the scheme. Different ownership periods apply to gifts and inheritances. For acquisitions from 1 January 2025, a three-year continuation period also applies in principle.

The precise application depends on the circumstances and can change. Have the tax structure assessed by a specialist adviser and check the current conditions with the Dutch Tax Administration before making final decisions.

Source: Dutch Tax Administration – business succession scheme

Valuation and financing must align

A valuation is not only needed to determine a purchase price. The valuation also affects the financing of the transfer and the expectations within the family.

At a minimum, document:

• which valuation method is used;
• which assumptions and forecasts are included;
• which part is paid immediately;
• whether part is gifted or financed;
• which securities or conditions apply;
• what happens if results after the transfer differ significantly.

An independent valuation can help prevent disputes afterwards, particularly when several family members have different interests.

Make roles and decision-making authority explicit

A common transition question is how much influence the departing owner retains. “Helping out for a while” sounds practical, but without clear agreements it can quickly create dual leadership.

Be specific about:

• who has final responsibility for day-to-day decisions;
• which decisions are still made jointly;
• how long the transition period lasts;
• which information the former owner continues to receive;
• how conflicts are resolved;
• when authorities transfer permanently.

With multiple shareholders, a shareholders' agreement, family charter or other governance arrangements may be relevant. The legal structure should suit the business and the family relationships.

Approach: build a transfer dossier that still works after departure

A practical approach is to create one transfer dossier that contains not only contracts, but also how the business actually operates.

For example, include:

1. organisational structure, roles and authorities;
2. key customers, suppliers and advisers;
3. contracts, terms and special arrangements;
4. financial obligations and recurring decision points;
5. systems, access rights and data ownership;
6. critical processes and exceptions;
7. current risks, claims and commitments;
8. knowledge that currently resides mainly with the owner or key people;
9. decisions made during the transfer and why;
10. open actions with an owner, deadline and status.

The goal is simple: after the transfer, the successor must be able to understand what is happening, why certain decisions were made and where evidence or documentation can be found.

Test the transfer before the actual transfer date

A useful test is to let the successor act temporarily as the first point of contact while the departing owner is still available. This exposes knowledge gaps before they become an operational problem.

Watch, for example, for questions that keep recurring:

• Where is this contract stored?
• Who is authorised to decide this?
• Why does this customer have an exception?
• Which supplier do we call in the event of a failure?
• How did this pricing agreement come about?
• Which manual step still sits outside the system?

Every recurring question is a signal that knowledge, process information or decision logic still needs to be documented.

The transfer is only complete when the business can continue independently

A business transfer is not successful simply because shares, money and signatures have changed hands. The real test is whether the organisation can then operate without daily dependence on the former owner.

That is why tax, financing, governance and knowledge retention belong in one transfer plan. Legal and tax specialists remain essential in their own fields; Bedrijfsgeheugen can also help bring operational knowledge, documents, agreements and actions together systematically.

FAQ: When should a family business start preparing for the transfer? || Start as early as possible by mapping ownership, financing, roles and business-critical knowledge; tax and legal deadlines may require additional preparation.

FAQ: Does the BOR automatically apply to a transfer within the family? || No. The Dutch Tax Administration sets conditions relating to matters including the business, the ownership period and continuation; have the current application assessed for the specific situation.