The strategic role of the holding company in succession planning: mitigating the challenges of invalidity and ensuring business continuity

Abstract

The holding company has become an important tool for those who want to plan the succession of assets or companies. This article aims, in addition to observing the process of creating a family or asset holding company as the main tool in succession planning, analyzing its tax advantages and reducing conflicts and protecting assets, it will also address which causes can invalidate the effects of this type of company. The holding mechanism's main purpose is to resolve the impacts of an unplanned succession that carries with its family conflicts, high tax burdens and slow implementation, whatever the will. The holding as a tool in succession planning has demonstrated efficiency in its main objective, when, through qualified professionals, it is carried out in a well-structured way, analyzing each case individually and outlining the objectives to be achieved by those who plan. Finally, we observed that holders of assets and companies have used this means for fraudulent purposes, which can leave the validation of holdings with a weakened nature, leaving no other consequence, namely the invalidation of their effects. In this study, bibliographic and documentary research was used as a methodology, analyzing academic articles, jurisprudence, doctrines, and legal texts of the Brazilian legal system. In general, this article explains succession planning, the holding company as a tool in this process and the causes that may invalidate its creation. Despite the importance of this mechanism, which has become a relevant tool in the business and family environment, the work also points out the possible problems inherent to this modality used in succession planning, such as fraud against creditors and execution fraud, and seeks to respond in which situations the use of this tool can be considered illicit, leading to the recognition of its total invalidity when its purpose is diverted.