unternehmensnachfolge-anwalt.at
Mag. Bernhard Brandauer, Rechtsanwalt
When an internal family succession is not viable, the sale needs orderly preparation: owner decision, sale mandate, information control and a clean handover to transaction counsel.
If an internal family succession does not come together, the sale is often the most reasonable last succession option. That is not a defeat, but a deliberate decision. The business remains viable, the family withdraws in an orderly manner and the handover moves to another entrepreneurial pair. This order does not appear at the end, though. It must start before the first buyer conversation.
This post describes the path from an internal solution that is not viable to a prepared external sale. It covers the owners' decision, the sale mandate, information control, the cleanup of personal roles and side arrangements, the choice between a share sale and an asset sale, the company's readiness for sale, the family's transition role and the handover to transaction counsel.
It is not a general due diligence article. The focus here is succession preparation; for the later contract phase, Unternehmenskauf-Anwalt provides the transaction-law perspective. The topic area on sale as a succession option frames the strategic decision.
The check orders family option, salability and structure. The result can be sent to the firm with the key facts.
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A written decision supported by the relevant owners documents who backs the sale, which role the family keeps during the transition and which economic expectations are attached. Formal shareholder resolutions may also be required under the articles. Without that clarity, external negotiations are repeatedly questioned internally.
Anyone still checking internally should not silently start the external road. A short final loop with deadlines and criteria closes the internal option before the external preparation really starts. Otherwise contradictory signals reach successors, staff and later buyers.
Unclear roles between family members, informal side salaries, housing rights, private use of company cars, family guarantees or silent participations increase later contract complexity and reduce the purchase price. Cleaning them up before buyer outreach expands the later negotiating space.
Personal guarantees, scattered real estate held by family members and key staff without formal ties are typical construction sites. As long as they remain open, every buyer conversation invites unnecessary discounts. A preparation step in a sensible order reduces later friction.
In a share sale, existing contracts, legal relationships and liabilities stay with the company and pass to the buyer indirectly. § 76 GmbHG requires a notarial deed for the transfer of GmbH shares and for the obligation to transfer them in the future. Transfer restrictions, holding structure and warranties must be settled before the contract phase.
In a sale of the business or essential assets, non-personal business-related legal relationships transfer under § 38 UGB. § 3 AVRAG orders the acquirer's entry into existing employment relationships. The structure is therefore based on a concrete list of positions rather than on general formulas.
Where shares, real estate and trademark rights sit with different holders or are to be carved out of the sale, a structure sketch before buyer outreach helps. It fixes allocation, purchase price components and transition contracts. Without such separation, wrong expectations arise in the data room.
The move from an internal solution to a sale is an economic and emotional decision. Before buyers are approached, the relevant owners should support the route in writing and unresolved objections should be addressed within the family. Depending on the articles, formal shareholder resolutions may also be required. The record orders the roles and creates a reliable base for an external approach.
The resolution says who runs the process, which role the transferor and other family members keep in the transition phase, what expectations exist on proceeds, timing and continuity, and where the limits of compromise lie. It is not an artistic legal document. It is a written understanding that is carried through the process.
Only then do actual preparation and the sale mandate make sense. The family transfer preparation guide stays relevant, because it bundles roles and balancing questions that do not disappear in a sale.
Once the goal is known, a specific responsibility for information arises. Buyers, staff, banks, suppliers and customers react differently to signals. Anyone who speaks too early loses control of the process. Anyone who speaks too late loses the trust of the own staff.
Practice is to widen the information circle in clear stages. First the closest family, then a small advisor round, then a controlled buyer outreach and only after a term sheet the wider circles. Confidentiality obligations and a well maintained data room complete the stages.
Sale and ongoing operations must be separated. Managers who have their own acquisition interest or could draw sale-relevant benefits should be clearly assigned. Otherwise operational and personal roles collide. The succession risk check gives a first view of the maturity of this separation.
In many family businesses roles and personal advantages grew over years. A spouse works without an employment contract. A daughter receives a family salary for occasional advice. A company car is used privately. A property owned by the family is let at a below-market rent. Everything of this is workable in daily life and toxic in a sale.
An external buyer will usually address these topics in the contract and may seek a price adjustment or security if uncertainty remains. These side arrangements are therefore documented, valued and, where possible, put into clear contract form before buyer outreach. Whatever should remain in the family is explicitly carved out. Whatever is sold is placed on transparent terms.
The role of the transferor must also be defined openly. An advisory contract for a limited time is workable. An informal ongoing decision role after closing contradicts the nature of a sale. A family that wants a fair handover must be able to end the transition. The topic area on management and control shows how the layers stay apart later.
The base decision between share sale and asset sale has economic and legal consequences. In a share sale, § 76 GmbHG requires a notarial deed for the transfer of GmbH shares and for the obligation to transfer them in the future. Transfer restrictions and approval clauses must be checked. Contractual relationships and liabilities in principle continue inside the company.
An asset sale follows a different pattern. § 38 UGB in principle transfers non-personal business-related legal relationships to the acquirer. § 3 AVRAG orders the acquirer's entry into existing employment relationships with rights and obligations. The structure follows a detailed list of positions rather than general formulas.
A special review strand concerns the limits from the company's capital. § 82 GmbHG limits payments to shareholders to the distributable balance sheet profit. Preparation costs, informal distributions or clearing accounts between seller and company must not hollow out the capital base. Ignoring these limits jeopardises validity and completion of the sale.
A sale needs a clearly defined mandate. Who decides on the seller side, who negotiates operationally, who coordinates the advisors. An informal mandate with rotating responsibility weakens every buyer relationship. The mandate is captured in writing, with clear representation rules for the family, so a buyer knows whom to address for which question.
The choice of advisors follows the specific mandate. M&A, audit, tax, notarial and legal work may run in parallel, but responsibilities and information channels should be fixed in writing. Once the term sheet and contract negotiation take centre stage, the process needs transaction-law leadership. A clean handover avoids duplicate work and contradictory recommendations.
Process limits concern timing and confidentiality. A sale should not be run without a defined end point, otherwise the seller loses control of the negotiation. A time window with clear milestones and an exit rule protect the business if negotiations fail to produce a viable result. Any planned return to internal options should be documented.
Once the preparation is robust, the process moves into the sale phase proper. Term sheet, due diligence, contract negotiation, purchase agreement and closing need clear transaction-law leadership. Succession preparation provides the agreed roles, ordered documents and workable structure on which the contract phase can build.
This separation protects both sides. Succession advice stays focused on family and preparation, transaction advice takes over the operational contract and completion phase. Documenting the handover, compiling the handover papers and informing the family belong to the transition.
The end result is not a spectacular signature but an orderly file from which buyer and family can work quickly. Such a file is the real deliverable of the preparation and makes the later contract predictable.
When internal family succession, a management buy-out and material restructuring options have been assessed honestly and none is viable for the family and business, an external sale is a sensible way forward. It should be documented as a deliberate decision rather than as an emergency exit.
For the GmbH, yes. § 76 GmbHG requires a notarial deed for the transfer of shares between the living and for the obligation to transfer them in the future. Additional approval requirements in the articles must be reviewed before contract signing.
In an asset sale non-personal business-related legal relationships in principle pass to the acquirer under § 38 UGB. § 3 AVRAG orders the acquirer's entry into existing employment relationships. The structure runs on a detailed list of positions rather than on a blanket transfer.
As soon as term sheet, due diligence and purchase contract negotiation take centre stage, the focus shifts to transaction advice. Succession advice remains responsible for the family decision, salability and preparation until then, so the contract can build on a solid base.
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