Year 2026 – A Turning Point for Succession in Family Businesses

In 2026, the first historically significant wave of generational transition among Czech family businesses will culminate. The first generation of founders from the 1990s is reaching retirement age and facing a crucial decision: what to do with their company next — pass it on to the family, sell it, or risk its gradual decline. Planning succession in a family business has therefore never been more urgent, as statistics show that without proper planning only about one third of family businesses survive the transfer to the next generation.

Why is 2026 a turning point?

According to the Association of Small and Medium-Sized Enterprises (AMSP ČR), more than half of Czech family businesses (56%) remain in the hands of their founders. Most of these companies were established after 1989 and their founder generation, after more than 30 years of building their businesses, is now retiring en masse. It is estimated that more than 40,000 companies have owners older than 55 — and these companies will undergo major changes in the coming years. This is not a common cyclical phenomenon but a unique event in our economy: for the first time, such a large number of family businesses are being transferred between generations within a short period.
International experience also warns that only about 30% of family businesses survive the transition to the second generation (and only 12% successfully continue into the third generation). Family businesses are far from marginal — according to AMSP ČR data, they account for more than 50% of the GDP of the Czech Republic and employ approximately half of all workers in the private sector. The fate of family businesses during this generational transition may therefore affect not only individual families but also the entire economy.

What mistakes do companies make most often?

The process of transferring a business to the next generation is highly demanding and full of risks — as it involves legal, financial, and personal matters. Research confirms that it is associated with a number of well-documented problems, including destructive family conflicts, fear of losing control, unprepared successors, and even potential business failure. What specific mistakes occur most frequently in practice?

• Postponement and absence of a plan: Many owners lack a formal succession plan and postpone passing the company on to their children or another successor until the last moment. In the Czech Republic, generational transitions in family businesses unfortunately often take place without thorough prior preparation and a clear family agreement, increasing the risk of crisis scenarios. Without sufficient lead time, succession then occurs chaotically and under pressure instead of being managed strategically.
• Lack of successor involvement and preparedness: The successor generation is often involved in company management too late or only symbolically. It frequently happens that descendants assume responsibility for managing the family business without having had the opportunity to participate in key decisions in advance, which slows their preparation and weakens their relationship with the company. The new leader may then lack the necessary experience and employee respect. Founders also tend to have unrealistic expectations that the successor can assume all their roles at once. However, if the younger generation has not been gradually guided toward responsibility, they may fail to develop a strong connection to the business or lack sufficient competence to manage it successfully.
• Family conflicts and unclear expectations: Generational transition may expose old grievances or family rivalries. Typical risks include disputes among siblings or relatives over influence and fair ownership shares. Unresolved property matters or favoritism toward one descendant can lead to destructive family conflicts that threaten both relationships and the business itself. Founders sometimes pressure their children to take over the company even if the successor lacks interest or talent. It is therefore essential to clarify within the family in advance who will take over the company and under what conditions, and to align expectations sensitively.
• Fear of losing control: Founders themselves can become an obstacle to a smooth transition if they are unable to relinquish company management. It is understandable that after decades of building the business, they feel a strong emotional attachment. However, fear of handing over the reins and “letting go of control” can paradoxically harm the company if the owner refuses to delegate authority to the successor. The successor then receives neither trust nor sufficient space to prove themselves, and the founder remains “irreplaceable.” In practice, the company may stagnate or even suffer a shock when the founder suddenly leaves (for example due to health reasons), as no one in management is fully prepared to take over.
• Underestimating legal and financial aspects: Sometimes owners oversimplify the situation by letting everything follow an “automatic” course — for example, they only write a will assuming the family will divide the company themselves. However, a will or standard inheritance proceedings are often insufficient for larger companies because they do not ensure management continuity or detailed governance rules. Moreover, if multiple descendants inherit the company simultaneously, prolonged disputes over management or assets may arise and paralyze operations. Fortunately, all these legal uncertainties can be anticipated and properly addressed in advance if given sufficient attention.

The way forward: secure succession with a partner

Despite these risks, there are proven approaches to safely and successfully transfer a business to the next generation. The key is to start early and treat succession as a long-term process rather than a one-time event. Experienced experts often recommend preparing for stepping down from leadership 5 to 10 years in advance. For founders, this means gradually reducing their irreplaceability in day-to-day operations — delegating authority, building a management team, and systematically preparing their successor. It is advisable to involve the younger generation in company management gradually, allowing them to gain experience alongside the founder and participate in key decisions within the family business. This strengthens their competence and loyalty to the company. Successors should feel that their opinions are respected while being fairly rewarded for their contributions, which increases their motivation to continue the family legacy.

It is also essential to establish clear rules for the post-transfer period. A proven solution is to create a family constitution or shareholder agreement in which the entire family agrees in advance on the principles governing the company after the generational transition (profit distribution, division of roles, decision-making processes, dispute resolution, etc.). Such documents help prevent misunderstandings and conflicts — everyone knows what to expect and what the rules of the game are. If multiple successors are involved, it is also advisable to address compensation for family members who will not actively manage the company (e.g., through shares, dividends, or other assets) to prevent feelings of injustice. In some cases, no descendant is interested in managing the business — in such situations, appointing an external professional executive or selling the company to an investor may be an appropriate solution. These alternatives can also be planned in advance to preserve the company’s reputation and maximize transaction value.

From a legal and financial perspective, succession must also be thoroughly planned. There are instruments that significantly facilitate a smooth transfer. For example, establishing a family holding structure or trust fund makes it possible to divide ownership and control among descendants without fragmenting ownership or threatening management continuity. The founder may retain key decision-making powers and transfer management gradually depending on how successors prove themselves. These modern instruments are often more efficient and flexible than wills or gift agreements. Each option (gifting, sale of shares, inheritance, trust structures, etc.) has its own advantages, disadvantages, and tax implications — therefore, consulting experts is highly recommended. An experienced advisor or attorney can recommend the optimal transfer structure, address legal risks, and design a tax-efficient solution for the entire transaction.

The primary goal of every founder should be preserving the company’s viability and family harmony. With proper planning, generational transition does not have to pose a threat — on the contrary, it can become an opportunity to launch a new phase of growth under the leadership of the incoming generation. For owners, it is a chance to pass their lifelong work into good hands and ensure the continuation of the family legacy. However, achieving this requires not being afraid to seek professional assistance: an experienced external partner brings perspective, expertise, and the necessary empathy. The law firm AVENTAS has extensive experience in providing legal assistance with succession — serving as a guide for founders throughout the process and helping set up the entire transition so that it proceeds safely and in line with the family’s wishes. An empathetic and patient advisor can act as a mediator in family discussions and as an architect of solutions that protect your business for future generations.

Succession in a family business does not have to be a crisis if approached strategically and with a clear mind. The year 2026 represents a turning point for many family businesses — but with a solid plan and a reliable partner by your side, it can also mark the successful beginning of a new chapter.

Do not leave your company’s future to chance. Contact our AVENTAS experts and together we will plan the safe transfer of your family business to the next generation. (Schedule a non-binding consultation today.)