1 Study and definition of the problem

The Government considers entrepreneurship to be of great importance. For that reason much attention is given to the last phase of the life cycle of personal entrepreneurship, that which is, the termination of a business. A large part of businesses need to be transferred, which is mainly caused by aging. Babyboomers are leaving the economic process. In cases where there is no opportunity for the business to be transferred, it means that it will cease to exist. Due to this business termination, economic capital could be lost, which could also delay the economic growth in a country. This explains the desire of the Government to preserve the continuity of existing businesses as much as possible. However, the question is whether the Government should play a role in the transfer of businesses, and – in case affirmative – how this role should be adopted. This particular research focuses on this question to the extent that it concerns individuals who run their business as an unincorporated business and those who have placed their business enterprise in an incorporated business (holders of a substantial interest1 ). This research restricts itself to a possible intervention through the tax legislation.

The legislation includes a comprehensive diversity of fiscal business transfer facilities. The research is centered on facilities, which are focused on individuals. The first question is whether the facility is legitimate. This is measured on the basis of the theory of welfare economics. The research will however not be restricted to legitimacy solely. In case of a legitimate facility, I consider the acceptability of business transfer facilities the following criteria to be important: equality, neutrality, effectiveness and efficiency.

The afore-mentioned has led to the next definition of the problem and subquestions, where the definition of the problem and sub-questions will be answered in section 7.2 up until 7.6: