Entrepreneurs know what it costs in energy and capital to start, develop, and make profitable an SME. The absence of adequate estate planning can have undesirable tax consequences for heirs. Who wants to imagine the disputes that could arise between family business of an entrepreneur in the absence of estate planning? Who wants to see the life’s work to which the entrepreneur has tirelessly devoted himself reduced to dissolution?


There are many tools for planning the succession of your business. All these possibilities can represent a real headache for the entrepreneur. In the case of a transfer of a family business, the stakes are more important, particularly for small and medium-sized businesses. Consulting your notary will help you demystify the various legal instruments available to you. It will direct you to the tools best suited to your situation and to the professionals whose intervention is essential in the transfer of a business: accountants, tax experts and lawyers.


The notary is your ally par excellence in planning the transfer of your business. He will help you design transmission strategies and refer you to an expert to have the fair market value (FMV) of the business assessed a key prerequisite. The FMV will allow you to determine the tax impacts that will apply to your death and your notary will direct you towards the development of financing strategies to minimize this tax impact with the help of M&A advisory. Its role is to ensure your peace of mind regarding the protection of your heirs and the continuity of your business after your departure.


Estate freeze: the value of the business is “frozen” at a given date in non-participating shares in the hands of the entrepreneur, and the heirs will benefit from the appreciation of the new participating shares which will be granted to them.

Assignment: sale or gift to a family member

The creation of a trust: when the succession is not defined


An estate freeze is a transaction that involves freezing the value of the business at a given date and transferring the future appreciation to the next generation. It is based on an exchange of shares that will increase in value (participating shares, often non-voting) into preferred shares whose value will remain fixed (non-participating shares). The business owner also receives voting and non-participating shares which he will retain to maintain control of his SME until the full redemption of the freeze preferred shares through an M&A advisor. The holder of the control shares can also redeem the freeze shares at his discretion.

These are the participating shares that the entrepreneur bequeaths to his heirs: children and grandchildren. These beneficiaries will benefit from the profits generated. As well as from the future increase in the value of the company. The estate freeze makes it possible to establish a ceiling on the tax consequences that would apply during the transfer of the SME and to defer them to a later date. The main advantages of the estate freeze consist in measuring and reducing the value of the income tax which may fall on the beneficiaries upon the death of the owner of the business, as well as in splitting the income between the different heirs to the trust. It is important to note that in the event of the dissolution of the company,


Estate freeze: conversion of participating shares into preferred shares whose value will remain fixed. It is the heirs who will benefit from the dividends on the future capital gain.

The discretionary trust: makes it possible to distribute capital remittances. At the discretion of the entrepreneur to the beneficiaries of his choice and to postpone the choice of succession.

The will: the cornerstone of planning the transfer of a business. The will makes it possible to fairly distribute the freezing actions and other assets between the heirs.

Unanimous shareholder agreement: agreement that deals with decisions that must be taken unanimously by current and future shareholders. It could also specify the terms for redeeming the freeze shares received during the estate freeze.


Your notary will provide a schedule for repurchasing the freeze shares. Ie a repurchase agreement, to ensure that the entrepreneur will be reimbursed. The estate freeze is part of a larger planning. The notary will ensure that your will is reviewed, as well as your incapacity mandate. He will also ensure that your shareholder agreement is up to date and in line with the other estate documents.

Avoid the negative and often irreversible impacts of a poorly planned. Or unplanned succession by consulting your notary specializing in SME INTER Notaries business services. This is essential to avoid the pitfalls of transferring a family business. And the conflicts that this could cause, in addition to the loss of value, the impossibility of selling. Or the legacy of a tax burden to those you would have liked to protect.

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