The holding company, or family holding company, plays an essential role as a legal tool in the field of business. And in terms of assets, it is of great value both to simplify the management of family investments and to prepare for the transfer.

A family business is a company where the management and the majority of the capital are owned by a single family. The members of this family work closely together to manage the family business and make critical decisions. Different categories of family businesses exist.

They can vary in size and specialize in various areas of activity such as production, sales, service offerings, etc.

The family business is mentioned in the Commercial Code through various provisions concerning it. Sometimes they are passed on from generation to generation.

They are companies known for their stability and reliability. The transfer of a family business benefits, under certain conditions, from the Dutreil Pact.

This system makes it possible to reduce tax costs and to benefit from a partial exemption from inheritance tax. We tell you everything about the family holding company.

What are the main characteristics of family businesses?

The purpose of a holding company is to organize various situations in business life, such as structuring a group of companies or real estate assets in particular. Some holding companies are passive, i.e. they only serve to hold a portfolio of participations in other companies.

Others are animators, which means that they participate actively in the management of the policy of the group of companies, and provide various services to subsidiary companies.

A family holding company is a company whose mission is to own and structure family assets. The funds consist of various investments, such as shares in businesses or investments in real estate.

Starting a family business can be an opportunity to give shared meaning to family investments. In addition to financial, legal and fiscal benefits, it also offers the possibility of involving family members in an entrepreneurial project.

The family holding company is generally an SCI or an SAS. However, it can also take the form of a SARL.

The advantages of family holdings

There are multiple benefits to establishing a family business. Such as mutual trust, good understanding between the partners and a motivation common to all members of the family concerned.

Trust is one of the benefits associated with family businesses. A relationship of trust plays a crucial role in the creation and success of a family business. The loyalty of all employees and their dedication to their joint activity is a powerful driver and a key element of success.

Motivation is also present because all members of the family business are highly motivated by the success of their collective project, which reinforces the cohesion of the group.

In addition, family companies are frequently distinguished by transparent and direct communication between their members. Franchise is an advantage that can make decision making easier.

The benefits do not end there, as there are also beneficial aspects on the economy and the sustainability of the company. Significant savings are achieved in family businesses, thanks to the sharing of the various tasks and responsibilities between all members, which saves on manpower and on management costs.

Also, family businesses can ensure the continuity of their activities and operations from one generation to the next. This continuity allows for long-term planning for future generations, with a business that grows over time.

The foundations of the company being laid by the founders, the mission of the following generations is to perpetuate the plans established initially, while constantly improving them, maintaining the vision of their predecessors.

Finally, the family holding inspires the trust of customers, through its values, its image and its sustainability. In the event of problems, the members of the family business mobilize together to find solutions.

What is the legal status of a family business?

The creation of this type of business is generally in the form of an SARL (limited liability company), an SA (limited company) or an SAS (simplified joint stock company). But there are also family holding companies in the form of SCI. (Real estate civil society).

To form an SA, it is necessary to have at least 2 individuals, and up to 7 individuals when the company plans to carry out transactions on the stock exchange.

It is necessary for it to have a board of directors comprising between 3 and 18 shareholder members, from which the president of the SAS is chosen. He must have at least 37,000 euros in capital.

A family business can also opt for the legal status of SAS. However, it is important that his field of activity is not linked to the legal field, the judicial sector or the leisure sector.

Unlike the simplified joint stock company, the share capital of the simplified joint stock company can be defined in a flexible manner according to the size of the company and its requirements.

The family SARL includes several members of the company who are related to each other.

Father, mother, children, grandparents can join forces to found a family SARL. Apart from this direct link, the link by parentage, by marriage or by PACS can also make it possible to join forces to create an SARL.

Family SCI is a legal structure that allows members of the same family to own real estate together.

Each member of the family can thus own a share in the company according to their financial participation when buying the property.

How does a family holding company work?

The members of a family business are all directly related, which can include the founders and their descendants.

Each of the members makes all decisions related to the management of the company internally, working together informally, through relationships based on trust.

What are the family businesses in France?

Among the many family businesses in France, there are some large groups such as Carrefour, L'Oréal, IKEA, Ford, Gallimard, Persavon. Some are family businesses with a long history, spanning more than 3 generations.

State of play of French family businesses in 2023

According to a study conducted by BpiFrance, currently, more than one family business manager out of four is over 60 years old and in the next ten years, more than one family business out of two will be in a situation of transfer.

Family governance, which promotes the creation of an entrepreneurial dynamic between family members, is an even more complex transmission issue.

76% of businesses do not have a family council or a family charter, or external help from Coaching, even if the trend is about to be reversed.

However, the challenges of the transfer of a family business are numerous. Indeed, it is crucial to know how to adapt the family business now. In the world of the future.

The study highlighted 5 profiles of family businesses. The entrenched family with a strong but not very competitive family identity, the company at the beginning of the family cycle, with a first generation with a very marked identity but still not very committed.

There is also the managerial family company, which is open to external skills, or even the one at the end of the family cycle, which is about to begin the process of transferring the business to another company.

Finally, there is the agile company, with a strong family identity and a strong sensitivity to CSR issues.

How do you start a family business?

After identifying the activity of the family business, a market study should be carried out to assess the viability and profitability of the project, as well as to have a precise understanding of the weaknesses and strengths.

At this stage, the objective is to analyze the competition and potential customers and determine how to attract them. During this stage, it is imperative to establish the projected turnover, at least over a period of three years, as well as the strategy to be implemented to achieve it.

The business plan covers the entire family professional project. The definition of the project and the measures to be taken for its realization are the first elements to be taken into account in the business plan.

In addition, it is crucial to include a financial study in the business plan, as it makes it possible to request financing from banks.

Then, it is a question of drafting the statutes. It is necessary to draft them and have them signed by all the founders of the company.

It is also necessary that the articles of association include several mandatory particulars, which may differ depending on the legal status of the family business.

Next, you have to manage the capital deposit, which involves the transfer of all or part of the company's share capital to an open bank account. It facilitates the collection of funds essential for the proper functioning of the company and ensures its financial stability.

This deposit can be made using a check, bank transfer, or cash deposit. Nowadays, it is also possible to make a deposit of social capital with an online bank.

It is essential to obtain a certificate of deposit of funds returned in order to proceed with the registration of the company.

Why is it useful to benefit from coaching for your family business?

For the transmission of a family business to the new generation, the challenge for heirs is sometimes to get their management accepted.

Indeed, managing a family business with more experienced parents is a performance challenge for new managers.

For their part, the ancients have a lot of lessons to pass on. That is why the ideal is to make a gradual transition.

It is possible that the older and experienced transferor of the business will continue to participate in the management of the business while gradually delegating responsibilities.

This allows the new generation to gradually become familiar with the business, while making a smooth change.

In a family business, co-management with several family members is an advantage when the future generation takes over the management of the company.

However, in such an important and delicate moment as the transfer of the family holding company, it is useful to be accompanied by professional coaches.

The certified coach in support for managers and executive committee is there every step of the way to guide company members toward their goals. He can coach the holding family for optimize the organization and effectiveness of the board of directors.

Visconti Partner has been supporting business leaders for many years. Certified coaches work with businesses to help them optimize their processes and achieve their goals.

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