In Germany, many small and medium-sized enterprises (SMEs) are faced with the challenging task of successfully mastering the generational transition. An unprepared succession can have serious consequences. The legal issues in the context of internal company succession in particular require careful and comprehensive consideration.
In an article for the "Guide to Corporate Succession 2025 ’, our GÖRG lawyers Dr Thomas Winkemann (lead), Dr Lars Weber, Dr Markus Söhnchen, Markus Beyer and Nora Dibbert introduce readers to the legal framework. The special features of internal succession compared to external succession are highlighted in order to create a clear understanding of the differences.
One focus is on the requirements under company law, in particular the options for transferring company shares and the coordination of inheritance law and company law consequences. Succession clauses, which are now established in many articles of association, play a central role in ensuring an orderly succession.
In addition, the authors deal with the inheritance law aspects of succession planning. Testamentary provisions that are specifically tailored to corporate succession help to minimise compulsory portion claims and avoid potential conflicts. At the same time, they offer structuring options to protect the interests of all parties involved.
Another important aspect is the tax planning of the succession. This involves the use of tax allowances, the examination of the need for tax relief in accordance with Section 28a ErbStG and inheritance tax optimisations that can facilitate the transfer of company shares. Instruments such as reservations of usufruct and pension commitments safeguard the interests of both the transferor and the successor.
The drafting of contracts for internal succession is also a central topic. The authors provide advice on relevant provisions in articles of association, such as succession clauses and profit distribution agreements. Securing the existence of the transferor and their pension provision is also discussed in order to make the transition predictable and transparent for all parties involved.
Liability issues and guarantees should not be underestimated. The article sheds light on the liability risks that can arise during the continuation of the company and provides recommendations for drafting liability agreements that protect both the transferor and the successor.
The article is rounded off by a consideration of psychological and family factors. Transparent allocation of roles, clear responsibilities and open communication within the family make a significant contribution to avoiding conflicts and promoting the acceptance of all parties involved. This not only protects the entrepreneurial decision-making freedom of the successor, but also strengthens the basis for a successful long-term succession.
More about the ‘Guide to Business Succession 2025 ’: https://www.dub.de/
