Questions clients ask

Once a price is agreed, the structure of a deal is usually treated as paperwork. By then most of what matters has already been decided: which entity buys or sells, how the consideration is paid, who carries which liabilities, and how each party can leave.

Settling the structure first means the terms are negotiated on a known footing. The holding vehicle, shareholder rights, financing and exit mechanics are designed together, so the price reflects what each party actually receives and nothing has to be reopened once counsel begins drafting.

K3 designs the structure at the outset, aligns it with the commercial terms, and coordinates legal counsel, tax specialists and lenders through to completion.

Most families build up businesses, property and investments one at a time, each held in a different name and often in a different jurisdiction. Over time control becomes unclear, decisions slow down, and a single event, whether a death, a dispute or a sale, can expose the whole.

A holding structure brings those assets under one clear line of control. Typically a holding company sits at the top, with separate vehicles beneath it for operating businesses, property and investments, and where appropriate a foundation above it holding the shares for the family as a whole.

The right design depends on who should control what, who should benefit, and how the family expects to change over the next generation. K3 maps the existing holdings, designs the structure around those objectives and sees it put in place with the relevant specialists.

Succession is often treated as a question of who inherits. In practice it is three questions: who will own the business, who will run it, and who decides when the two disagree.

Planning settles ownership, through a holding company, a foundation or both, so that shares pass according to the founder’s intentions rather than by default. It also settles governance: a family charter, board composition, voting rights, and clear rules for family members who work in the business and those who do not.

Done well, succession is planned while the founder is still in control and tested before it is needed. K3 designs the ownership and governance structure, coordinates the legal and estate work with specialist counsel, and keeps the plan current as the family and the business change.

The first serious conversation with a partner, investor or buyer quickly becomes a review of how the business is held. Gaps found at that stage cost time, weaken the negotiating position and often reduce the price.

Before that conversation, a founder should have a clear group structure, with the operating business, its intellectual property and any property held in the right entities; a clean capitalisation table; shareholder agreements that set out control, transfers and exit; and accounts and contracts that match what the structure says.

It also helps to decide in advance what the founder wants to keep: control, a share of future value, or a clean exit. K3 reviews the existing structure, puts it in order before the process begins, and designs the terms of the transaction around those objectives.

Property held directly, in personal names or in a single company, is simple to acquire and difficult to finance, sell or pass on. Each sale, refinancing or change of ownership becomes a transaction in its own right.

A portfolio is usually better held through a holding company, with a separate vehicle for each property or group of properties. Each vehicle can then be financed, sold or brought into a joint venture on its own, risks stay contained, and ownership above the holding company can be planned for succession.

The right structure depends on how the portfolio will be financed, whether partners or developers are involved, and how long it is meant to be held. The illustrative mandate shows one such structure, carried from acquisition to completion.