Situation

Possibly the greatest challenge for the family business, is transferring the ownership and/or management of the business to the next generation. The European Commission estimates that around 480.000 companies are transferred each year. It is safe to say that the majority of these firms will be family companies. In addition, the Commission also estimates that over 2 million jobs are affected by these transfers.

It is undisputable that there is a lot at risk when family businesses are passed on from one generation to the next, therefore, it is essential that policy makers at both the national and European level create framework conditions to ensure smooth transitions.

With better framework conditions for family business transfers in Europe, thousands of family companies, often deep-rooted in local communities, could be maintained for the long-term, through the intrinsic use of patient capital and responsible ownership which is at the heart of the family business in Europe.

EFB calls for

• A greater emphasis and consideration on business transfers by policy makers
• Tax and regulatory frameworks that do not put family businesses at a disadvantage when a transfer takes place
• Accurate yearly data on the transfer of business situation in Europe
• Improved dissemination of best practices between Member States
• More public support to help, especially small and medium sized, family businesses better prepare their transfers

Read our Policy Papers & Studies

¹ Business Dynamics: Start-ups, Business Transfers and Bankruptcy, European Commission, January 2011, p105.