Family companies are used to structure company and asset succession. However, a family company can also be an interesting model for structuring assets independently of a generation change.
A family asset pool or family investment company is a company that holds family assets and in which the members of a family are shareholders. The family investment company can be established as a partnership or corporation. It can limit itself to holding and managing the assets, or it can be commercially active on its own.
Fund structures are used to consolidate and manage the assets of a family and to give members of the family the opportunity to benefit from them across generations. As such, the establishment of a family asset pool can be a good alternative to a family foundation or to a lifetime gift or testamentary transfer.
There may be tax or inheritance reasons in favor of setting up a family investment company. In addition, the family investment company can prevent the assets from being fragmented or smashed if shaped accordingly.
Upon the establishment of a family asset pool, the previous owner transfers their shares in
to the family investment company that holds and manages these assets. The previous owner becomes a shareholder of the family investment company and thus retains control over the contributed assets.
In addition, those family members who are to receive the assets on a long-term basis also become shareholders. To this end, the shares in the family pool are distributed in the form of free allowances. If the assets are transferred over an extended period of several decades, allowances can also be used repeatedly. The income of each shareholder is taxed at the personal tax rate, on which the younger generation often pays even less.
In general, the family investment company is established as a partnership (partnership under civil law, limited partnership or GmbH & Co. KG). However, it is also possible to set up a corporation (GmbH or AG).
When deciding on a legal form, the tax implications are not the only factor involved. The (corporate) legal particularities of the individual legal forms should also be taken into account.
There are many reasons for setting up a family investment company and the framework conditions of the family are varied. Therefore, there is no one right design that fits all family investment companies. However, the following considerations are usually at the center of the structuring:
The family asset pool can be a good way of structuring assets during your lifetime and transferring them in a controlled manner to the next generation. Our experienced advisors will work with you to develop the optimal structure for your assets. Among other things, we handle
Would you like to set up a family pool or do you have specific questions? Your experienced contacts are attorney Boris Piekarek and attorney Susanne Articus. Please feel free to contact us at any time. The easiest way to contact us is by e-mail (firstname.lastname@example.org) or by telephone (+49 (0)69 76 75 77 80).