Business succession: finding the right successor.
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- More than 15 years advising owner-managed companies in the German-speaking region
- Over 100 completed transactions
- 100 % independent — no bank, no fund
- Confidential from the first conversation
For most owners, business succession is the most important entrepreneurial decision of their lives. It affects life's work, employees, customers and family at the same time. In the DACH region tens of thousands of owner-led companies will face exactly this task in the coming years — and in many cases an internal family solution is no longer realistic.
IGCP Capital Partners has been guiding entrepreneurs through succession for more than 15 years. Across more than 100 transactions we have found successors, structured handovers and led owners through complex negotiations — discreetly, independently and on equal footing. This page gives an overview of the routes, the process and the right timing for an orderly succession.
IGCP advises on the sale and external succession of owner-managed and niche companies with EUR 0.3 to 15 million in annual revenue in Austria, Germany and Switzerland — across all sectors, on the seller's side, with no investment interests of our own. A structured sale process typically takes three to six months with us; six to twelve months is common in the market.
Advisory region: Germany, Austria and Switzerland.
IGCP Capital Partners advises owners across the entire DACH region — in Germany, Austria and Switzerland. The mandate profile covers owner-managed and niche companies with EUR 0.3 to 15 million in annual revenue. Advice is provided on the seller's side, independently and without any investment interests of our own. Legal and tax questions of the respective jurisdiction are developed together with the client's tax advisers and lawyers.
Routes to succession
There are essentially three main routes for passing a company into new hands. Which one is right depends on size, sector, owner goals and the availability of suitable people.
Family-internal succession. Handing over to the next generation is emotionally natural, but only works if successors are available, qualified and genuinely willing. Where this is not the case, the family should talk openly about external solutions — the earlier the better.
Management Buy-out (MBO) or Management Buy-in (MBI). In an MBO the existing management takes over, in an MBI an external manager steps into the owner role. Both preserve continuity but require a viable financing structure. Differences, opportunities and pitfalls are covered in our article MBO vs. MBI. Financing, valuation and the contract package for this route are covered under Management buy-out.
Sale to a strategic buyer or investor. Strategics from the same or an adjacent sector often pay higher prices because they can realise synergies. Financial investors often offer more flexibility on the seller's role and the transition. The two routes are not mutually exclusive — both are tested in parallel in a structured process.
The process in five phases
An orderly succession follows a clear path. We structure it in five phases: standpoint check and valuation, preparation of sale materials, discreet outreach to suitable candidates, negotiation and contract, handover and closing. Each phase has its own decision points — and in each phase the quality of the outcome for owner, employees and buyer is determined.
A detailed description with timelines and typical pitfalls is available in our article Business succession: the five phases of an orderly handover.
In all phases the same applies: discretion protects enterprise value. We work consistently with anonymised documents, NDAs and tight control of information flows — towards employees, customers and competitors.
Business succession in Austria: trade licence, notarial deed and taxes
For Austrian businesses the succession question is no less pressing than in Germany: according to calculations by the Austrian Economic Chamber, around 51,500 small and medium-sized enterprises are due for handover between 2020 and 2029. The process logic is universal, but some particularities shape timeline and net result. The trade licence (Gewerbeberechtigung) is personal and does not pass automatically to the successor, who needs a licence of their own or appoints a licensed managing director. GmbH shares are transferred by notarial deed (§ 76 para. 2 GmbHG) and the change is registered in the Firmenbuch; employment relationships transfer under § 3 AVRAG.
On the tax side, owners who have reached the age of 60 and cease their active working life can tax the gain from selling a sole proprietorship or partnership interest at the half rate under § 37 para. 5 EStG, provided seven years have passed since the business was founded or acquired; alternatives are a EUR 7,300 allowance or spreading the gain over three years. Gains on GmbH shares held privately are taxed at the special rate of 27.5 %. Austria abolished inheritance and gift tax in 2008, so an intra-family handover triggers no gift tax, but a notification duty and — for business real estate — real estate transfer tax with a conditional allowance apply. Tax structuring belongs to the tax adviser; we make sure it is reflected in timeline and negotiation. See also business succession in Austria and our guide to handing over a business in Austria.
The right time
The most common mistake is to start too late. Those who sell for health reasons or under time pressure lose negotiating power — and usually price as well. Conversely, preparing for succession mentally long before it is concrete never hurts.
Four signals that point to starting soon are described in The right time for succession. These include a stable business performance, a favourable valuation environment and the personal readiness to let go.
Tax and legal aspects are a key part of every succession. These topics are handled together with the client's tax advisor and lawyer — IGCP runs the economic and strategic steering of the process, not the tax or legal advice.
Frequently Asked Questions
- How long does a business succession take?
- From the first standpoint check to handover, owners should realistically plan twelve to twenty-four months. Preparation — numbers, valuation, clarifying your own goals — often takes as long as the actual sale or transfer process. Starting early gives more room to choose the successor and to set the price.
- How do I find a successor outside the family?
- Options include the existing management (MBO), external managers (MBI), strategic buyers in the sector and financial investors. The right route depends on company size, industry, employee structure and your personal goals. A structured process identifies several suitable options in parallel — improving negotiating position and outcome for everyone.
- What does M&A advisory cost?
- Typically a manageable retainer combined with a success fee payable only on closing. The amount depends on transaction size and complexity. For a concrete quote we get to know your company in a confidential first meeting — free of charge and without obligation.
- What tax reliefs apply when handing over a business in Austria?
- Owners aged 60 or older who cease their active working life can tax the gain from selling a sole proprietorship or partnership interest at the half rate under § 37 para. 5 EStG, provided the business has existed for seven years since foundation or acquisition. Alternatives are a EUR 7,300 allowance or spreading the gain over three years. Gains on privately held GmbH shares are taxed at 27.5 %. Austria has no inheritance or gift tax since 2008; real estate in the business remains subject to real estate transfer tax. Your tax adviser assesses the individual case — before the handover, not after.
- Do you also advise in Switzerland?
- Yes. IGCP Capital Partners advises across the entire DACH region — in Germany, Austria and Switzerland. The firm is headquartered in Vienna. The tax and legal implementation is carried out together with the client's local advisers in each case.
If you are thinking about succession, talk to us confidentially and without obligation.