A company transfer rarely is an easy task. Why this is the case is pretty obvious: In a company transfer the company is handed over by the entrepreneur to a successor. The entrepreneur wants to make sure that the company goes on according to his values which can cause displeasure in the successor. The issues company transfer and company transition period might cause conflicts that might threaten the existence of the company in the worst case.
Why should the company transition period be properly managed:
No matter why a company transfer is at hand – be it health or personal issues, the transition period has to be planned in detail. Usually you are not only entrepreneur but employer as well and as such you have the responsibility for the future of your employees. The transfer planning is crucial for an effective company transition period.
To reach optimal results in the transition of a sustainable company years of planning are necessary so that the future of the existing employments is properly regulated. How confident are you as an employer that you can successfully hand over your company to your successor? An ideal plan for a company takeover gives the new executives a complete operating manual for the company. Your successor should be well-prepared for his first day in the company. As new boss he has to be able to develop progress for the company to protect your investment and to make the transition period successful for your employees and other stakeholders like customers and business partners.
What should be observed in a company transfer process?
The succession period in a company is a transition period that is not easy for the leaving entrepreneur and the successor. In some company transition periods, the succession in disturbed by the leaving entrepreneur who cannot let go and is permanently looking over the shoulder of the new management. To stop this from happening, the succession within the family or sale of a company should be planned as early as possible. For an optimal company transition a detailed planning is the basic requirement that includes legal and tax issues that are necessary for the company transfer. If the company is sold to an extern byer all important information should be written down. Tax issues have to be transparent and settled. The takeover of employees after the sale is a very important issue.
Company transfer in family businesses:
Especially in family businesses the company transition period might be very emotional. If you lead a family business and plan to hand it over to a successor, it is of utmost importance that you spend time with your potential successor to make sure that the transition period will run as smooth as possible. While conducting a company takeover ‘training plan’ for your successor you have to identify all crucial procedures within your company. The new owner should know every procedure and be trained in it which needs time again. Therefore, it is absolutely necessary to plan ahead for a sufficient transition period. To ensure an efficient, transparent and fair succession planning during the company transition the process should include as much dialog within the family as possible. The next generation needs to be included into the procedure. Make sure that the new owner will know exactly how the company should develop.
A successful transfer takes time:
Provide the next generation with the opportunity to take part in company decisions long before they take control themselves. Retreat from the business step by step – not all at once. Start with delegating important decisions to your probable successor, often a family member, that he learns to evaluate pros and cons and to come to the right decisions for your company.
When should a company transition be implemented?
There is no perfect company transition moment for every case. But it would be good to start as soon as possible. A transition period while the leaving owner is still alive is the most reasonable choice as it is far more difficult if a company succession process starts after the death of the owner. Plan one or two years ahead of your planned moment of leaving the company.
Problems appearing during a company transfer:
As already mentioned, a company transition process in general and especially in family businesses is no easy task. Many problems will be based on emotion: A leaving boss that cannot let go that thwarts new ideas right from the beginning. Confrontations within the family about the succession that lead to rifts among family members. Uncertainty among the employees that do not know what to expect from the new boss and from changes within the company he might decide as the trusted boss is leaving. Often there is a fear of dismissal or abolition treaties as result of the company transfer. New employers should be aware of those fears among the employees. The customer base should be integrated into the transition period as well.
Employees, employers and the company transfer:
In a company transfer it is of crucial importance what happens to the existing employment contracts. A company succession might be an employment rights nightmare as many important aspects of employment law have to be considered by the employer. The civil code offers guidelines about existing employment contracts that might be difficult to understand for non-lawyers including employers and employees. Usually the successor takes over all existing employment contracts and with them all rights and responsibilities his predecessor had as well. Usually, the collective agreements are taken over by the successor. If there should be new collective bargaining through the succession the new regulations will replace the old ones. Legal aspects of every contract have to be considered to make sure that the collective agreements do not backfire at the successor. During the transition period there is a prohibition of dismissal to protect the employees. Should the employees not be happy with the company transfer for any reason they have the opportunity to assert their right of objection. In this context the information duty of the leaving employer is of utmost importance. He has to inform his successor about the economic and social consequences of the company transfer. A proper briefing is crucial as possible ambiguities about employments can lead to compensation claims from the employees. The successor should be aware that employees have the right to threaten with contract termination or resignation. Therefore, the works council should be included in the process as well. It is important for the new employer to introduce himself to the employees and quickly has the chance to show his leading abilities. This is also an advantage in the generation transition process.
How I support you in your company transfer conflicts:
All involved parties connect a lot of emotions with the family business. Therefore, the issue cannot be checked of quickly, but requires a detailed debate. You are planning a company transfer of your family business? As specialist in this field I will assist you and your successor to find an optimal solution for your situation. As son of a dairy farmer, agronomist and cultural anthropologist I gained a lot of experience in family businesses on national and international level and work as a mediator in this special field. Spare yourselves useless trials at court and ugly family disagreements due to your company transfer. The advantage of a mediation is, that all involved parties pull together in the same direction of a successful company transfer and the necessary changes are performed in a way that all involved parties are satisfied in the end. I assist you within the framework of a mediation to match up your perceptions for a harmonious, productive future of your company.
Make an appointment for a first free preliminary, now to get to know each other and figure out, if a mediation is a useful option in your case under the phone number 0049 – 160 – 76 25 61 8