The business will, security for the future

A business will is a will that arranges for the continuity of your business in addition to your personal estate: who continues it, how heirs are bought out, who temporarily manages the company, and how its value is determined. Without such a will, the law determines what happens to your business — and this often turns out differently than you want or what is good for the company. Below, you can read why this document is so important and what it should contain.

What is a business will?

A business will is more than just recording your personal final wishes. It is a strategic instrument that safeguards the future of your company in the event that you are (unexpectedly) no longer around. It ensures that your business passes into good hands and that those who depend on it—family, employees, co-owners—do not end up in uncertainty.

What happens without a business will?

Without a will, the law determines what happens to your business after your death . This does not always align with your wishes or the interests of the company:

• Statutory distribution: in the case of a spouse and children, the children in principle inherit an equal share, but their claim only becomes due upon the death of the surviving partner.
• No designated successor: without an arrangement, it can be unclear who will continue the business, resulting in conflicts or stagnation.
• Fragmentation of control: shares or a share in a company may become distributed among heirs who are not involved with the company.

A business will prevents the legal standard from determining what happens to your life's work.

What do you arrange in a business will?

At its core, a business will resembles a regular will; the difference lies in the business-specific provisions, such as:

• Appointment of a successor for the continuation of the business.
• Valuation and settlement: how is the company valued and settled?
• Buying out other heirs, so that the successor can continue the business.
• Administrator or executor: who handles the settlement and temporary administration?
• Testamentary administration: if the children are still too young to run the business, you can appoint a temporary administrator.
• Distribution among heirs that does justice to both the business and the family.

Align the will with any shareholders' agreement or partnership agreement: these may contain their own provisions regarding death that must be consistent with the will.

Why you shouldn't wait

Many entrepreneurs think this can wait — too young, too healthy. That is precisely why it is wise to act now: most problems arise from unexpected deaths, for example after an accident. A business will is an act of foresight that safeguards continuity and prevents conflicts. It is a sign of good leadership and care for everyone who depends on your business.

Frequently asked questions about the entrepreneur's will

What is the difference compared to a regular will?

A standard will regulates your private estate. A business will adds company-specific arrangements, such as succession, valuation, and the management of the company. Both are drafted by a notary; for the business side, customized legal and tax arrangements are advisable.

Are there also tax aspects involved?

Certainly. When inheriting a business, tax benefits for business succession can play a major role, involving conditions and time limits. These rules change regularly, so have the tax aspects assessed up to date.

Can I choose my successor entirely myself?

You have considerable freedom to appoint a successor and arrange the business transfer, but you must take into account the children's statutory share. A well-drafted will combines your wishes with these legal entitlements, ensuring that the succession does not fall through after all.

Drafting a business will

Do you want a solid business will that does justice to your wishes and protects the future of your company? The legal experts at MKB Juristen advise on the legal and tax aspects and tailor the will to your business structure. View our expertise in corporate law or schedule a no-obligation consultation.