What prevents preservation
Consistently utilize the opportunities to maintain the company; Report on company valuation in inheritance law published
Bern, 01.04.2009 - The Federal Council sees no need for legislative action in the transfer of companies under inheritance law. He recorded this in a report published on Wednesday. The applicable law provides the owner with various instruments to organize the company succession sensibly and to prevent the company from being broken up after his death.
On the basis of a postulate from Council of States Christoffel Brändli, the Federal Council examined whether, in order to facilitate the transfer of companies under inheritance law, a lower going concern value, the capitalized earnings value in the sense of peasant land law, should be applied. He came to the conclusion that the market value should be adhered to. This value, which is based on the future financial income of the company, must be at least equal to the liquidation value. If the liquidation value exceeds the going concern value, the continuation of the company is not an economically viable alternative, states the Federal Council in its report. Refraining from a realistic assessment would give preference to those companies that behave in an uneconomical manner. A legal policy that intends or accepts the continuation of low-income or unprofitable companies cannot create sustainable jobs or maintain the supposed health of existing companies.
Arrange the succession in good time
The preservation of companies by inheritance is a recognized concern. The Federal Council is aware that the person taking over a company does not always have their own funds or outside capital to pay off the other heirs and finance the company. However, it cannot be the task of the legislature to remedy the consequences of a failure to regulate the succession.
In the opinion of the Federal Council, the owners of companies should consistently exhaust the possibilities of the applicable law. He points out that the owner can agree on a solution based on property or inheritance contracts with his spouse and the other heirs. In addition, the owner can transfer entrepreneurial responsibility to a successor without the latter having to participate in the company to the same extent in terms of capital.
Address for queries
Hermann Schmid, Federal Office of Justice, Tel. +41 31 322 40 87
Federal Department of Justice and Police
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