Family buy-out: passing the business to one child without wronging the others
In brief. In a family buy-out the owner gives part of the shares to the child who takes over and sells the rest to a holding company set up by that child, financed by debt. The owner receives cash, the business passes on, and the other children can be treated fairly.
A worked example
The company is worth EUR 12 m. The owner gives EUR 7 m of shares to the successor, who contributes them to a holding. The holding borrows EUR 4 m and buys the remaining EUR 5 m: EUR 4 m in cash and EUR 1 m as a vendor loan. The owner receives EUR 4 m now and EUR 1 m later, and can use part of it for the other children.
What makes it work
- Debt the company can repay without cutting investment.
- Values explained to the whole family before anything is signed.
- Clear governance: who runs, who decides, who receives dividends.
- A shareholders' agreement that anticipates future exits.
Country rules
In France, the Dutreil pact can reduce gift duties sharply, with specific thresholds for holdings. In the UAE, there are no gift or inheritance taxes, but forced heirship rules may apply to some families; foundations and family charters are the usual tools.
Our role
We build the holding's financial model, show each family member's position and run the process with the notary and lawyers.
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Request a reviewThis guide is general information. It is not investment, legal or tax advice. The rules quoted must be checked by your advisers before any decision.