Many business owners want to transfer shares in their company to their spouse or children while continuing to receive income from those shares and remaining involved in important decisions.<\/p>\n
This raises several practical questions: When should the transfer take place? How can the business owner retain sufficient income? How can the company\u2019s continuity be protected? And how can the interests of the different beneficiaries be balanced?<\/p>\n
Failing to plan ahead can create difficulties. After the business owner\u2019s death, the shares may be divided among several heirs, resulting in fragmented ownership, joint ownership or disagreements that could disrupt the company.<\/p>\n
On the other hand, gifting the shares in full ownership means that all the rights attached to them are transferred immediately. The donor may therefore lose the related income and decision-making rights sooner than intended.<\/p>\n
A gift with split ownership provides an intermediate solution. It allows the business owner to transfer ownership gradually while retaining certain rights for a defined period. However, the arrangement must be carefully planned. Voting rights, entitlement to dividends, share valuation, tax consequences and fairness among the heirs should all be considered before the gift is made.<\/p>\n
Full ownership of a share normally includes three main elements:<\/p>\n
Split ownership divides these rights between two persons: the usufruct holder and the bare owner.<\/p>\n
The usufruct<\/strong> is the temporary right to benefit from the shares. The usufruct holder may, in particular, receive dividends and take part in certain company decisions, including decisions concerning the allocation of profits.<\/p>\n The bare owner<\/strong> owns the shares but does not immediately enjoy all the rights attached to them, as some of those rights are temporarily held by the usufruct holder.<\/p>\n In practice, a business owner may gift the bare ownership of the shares to a spouse or children while retaining the usufruct.<\/p>\n The beneficiaries immediately become the bare owners of the shares, while the donor may continue to receive the related income. When the usufruct ends, it automatically combines with the bare ownership, and the beneficiaries become the full owners of the shares.<\/p>\n However, split ownership does not automatically determine who is entitled to each type of distribution or who may vote on each type of decision. These matters must be organised in accordance with the company\u2019s legal form, its articles of association and the deed of gift.<\/p>\n A gift with split ownership may serve several business, family and estate-planning objectives.<\/p>\n Plan the transfer of the business in advance.<\/strong> Retain a source of income.<\/strong> Prepare the company\u2019s future governance.<\/strong> Reduce the risk of family disputes.<\/strong> A gift with split ownership requires more than dividing ownership between the donor and the beneficiaries. The rights and obligations of each party must be clearly defined before the transaction is completed.<\/p>\n Who will receive the dividends and other distributions?<\/strong> Who will vote on company decisions?<\/strong> Are the deed of gift and the articles of association consistent?<\/strong> How should the shares be valued, and what are the tax consequences?<\/strong> How can fairness within the family be preserved?<\/strong> Because these matters are closely connected, a standard solution may not achieve the business owner\u2019s objectives. The arrangement should be designed around the company\u2019s ownership structure, the donor\u2019s financial needs, the company\u2019s governance and the family\u2019s circumstances.<\/p>\n There is no single split-ownership structure that is suitable for every business or every family.<\/p>\n Planning the transaction in advance makes it possible to confirm its feasibility, understand its legal and tax effects and make any necessary adjustments before the deed of gift is signed.<\/p>\n MKonsulting assists business owners and families in designing and securing gifts of company shares with split ownership. Our services include reviewing the parties\u2019 circumstances, defining the appropriate transfer structure, assessing its legal and tax consequences, valuing the shares and ensuring consistency with the company\u2019s articles of association.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":" Many business owners want to transfer shares in their company to their spouse or children while continuing to receive income from those shares and remaining involved in important decisions. This raises several practical questions: When should the transfer take place? How can the business owner retain sufficient income? How can the company\u2019s continuity be protected? […]<\/p>\n","protected":false},"author":5,"featured_media":2619,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[127,132,110],"tags":[],"class_list":["post-2620","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-en","category-heritage","category-law-and-taxation"],"_links":{"self":[{"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/posts\/2620","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/comments?post=2620"}],"version-history":[{"count":0,"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/posts\/2620\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/media\/2619"}],"wp:attachment":[{"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/media?parent=2620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/categories?post=2620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mkonsulting.ma\/en\/wp-json\/wp\/v2\/tags?post=2620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why consider this type of gift?<\/h5>\n
\nThe business owner can choose the beneficiaries, decide how many shares each person will receive and organise the transfer during their lifetime rather than leaving these matters to the succession process.<\/p>\n
\nBy keeping the usufruct, the donor may continue to receive dividends distributed by the company.<\/p>\n
\nThe arrangement can define the respective roles of the donor and the beneficiaries in the company\u2019s decision-making process.<\/p>\n
\nA planned transfer can limit the risks associated with joint ownership, fragmentation of the company\u2019s share capital and disagreements among heirs.<\/p>\nWhat should be considered before making the gift?<\/h5>\n
\nThe treatment may vary depending on the type of distribution. The deed of gift and the company\u2019s articles of association should therefore clearly address the respective rights of the usufruct holder and the bare owners.<\/p>\n
\nVoting rights may vary depending on the company\u2019s legal form and the nature of the decision. Retaining the usufruct does not necessarily allow the donor to retain all decision-making powers.<\/p>\n
\nThe relevant documents must contain compatible rules. Any approval clause, pre-emption right or other restriction that may affect the transfer should also be identified in advance.<\/p>\n
\nThe value attributed to the usufruct and bare ownership must be properly supported. The applicable tax treatment should also be assessed in light of the company, the rights transferred and the personal circumstances of the parties.<\/p>\n
\nSome beneficiaries may be actively involved in the company while others are not. The transfer should therefore take account of their different roles and interests to reduce the risk of future disputes.<\/p>\nA tailored approach is essential<\/h5>\n