How to reduce your workload without leaving your company
Retirement is a natural stage in the life of every entrepreneur. However, it does not always happen immediately or definitively. Many of our clients come to us with the same concern: “I want to rest, but I don’t want to completely detach myself from my company”.
At GM Tax Consultancy we know that partial retirement for entrepreneurs is an increasingly interesting alternative for all types of business owners. It allows you to reduce your workload, access part of your pension and remain linked to the company to the extent that you wish. In this article we explain what it involves, what options exist and how you can benefit from proper planning.
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What to do with your business when you retire? We explain the legal and tax alternatives for transferring your business: sale, family succession, transfer to employees or liquidation. |
What does partial retirement for entrepreneurs mean?
Unlike ordinary retirement, partial retirement does not mean leaving all activity. It is a flexible formula that allows you to:
- Remain connected to the company, albeit with fewer responsibilities.
- Combine business income with your retirement pension.
- Organise an orderly transition towards full retirement or prepare the future transfer of the company upon retirement.
Ultimately, it is a way of adjusting your level of business involvement to your personal and family needs.
Alternatives for partial retirement
Partial retirement for entrepreneurs is not regulated in the same way as for salaried employees. There are different formulas which, with proper planning, allow a balance between personal life and business continuity.
1. Delegate functions to the team
A first option is to reorganise internal responsibilities. You keep ownership of the company, but transfer certain functions to employees or trusted partners.
- You may delegate financial management to a financial director.
- Hand over operational management to a general manager.
- Keep only strategic decisions.
We recommend formalising these delegations in clear documents to avoid diffuse responsibilities.
2. Hire a manager or general director
Another alternative is to bring in an external manager. This professional profile assumes the daily leadership of the company, while you retain ownership and key decisions.
Advantages:
- Professionalisation of management.
- More free time for you.
- Peace of mind that the company continues to run with solid leadership.
It is important to regulate their functions in a senior management contract and establish control mechanisms and regular reporting.
3. Sell part of the company
The partial sale of shares is an intermediate option. It allows you to:
- Obtain liquidity.
- Bring in a partner who assumes part of the management.
- Maintain majority control or share decision-making.
Our experts always review the tax impact of this operation, as reductions and exemptions may apply in certain cases (for example, transfer of a family business).
4. Progressive succession
If there is a generational replacement, it is possible to plan a partial succession. You can gradually transfer shares to your children or heirs, while remaining involved in management.
This allows you to:
- Prepare the next generation.
- Avoid an abrupt transfer that could jeopardise business stability.
- Reduce family conflicts by defining from the outset who takes on each role.
In Catalonia, there are also legal figures, such as the succession agreement, which facilitate an orderly transfer with tax benefits.
| Partial retirement does not mean leaving your company: it is a flexible formula to reduce the management workload, access part of your pension, and remain linked to the business, ensuring continuity and stability. |
Compatibility with the pension
One of the key aspects of partial retirement is compatibility with the pension.
- The Social Security system allows active retirement, which consists of receiving up to 50% of your pension while maintaining business activity.
- If the company also has employees, it is possible to receive up to 100% of the pension, provided certain requirements are met.
Our experts analyse each case to calculate the impact of this compatibility on your total income.
Tax implications
Partial retirement is not only a personal decision: it has tax consequences that should be planned carefully.
- Personal Income Tax (IRPF): You must declare your pension, as well as any remuneration received from the company for your work, or dividends if the company distributes profits.
- Corporate Tax: if you continue to receive remuneration from the company, whether as a director or in other roles, this may be considered a deductible expense for the company’s Corporate Tax, provided it meets accounting and legal requirements.
- Inheritance and Gift Tax: In the event of transferring shares to family members, significant reductions may apply if certain requirements are met. In particular, for donations, the donor must be over 65 at the time of the transfer to apply the tax reduction.
- Wealth Tax: the ownership of shares may continue to be exempt from this tax if the company meets the requirements of a family business.
Employment and organisational impact
Partial retirement also has effects within the company:
- Employees must be informed of the new management structure.
- It is necessary to clearly define who makes decisions and how the new organisation is communicated.
- If a manager is hired, their employment conditions must be established in accordance with current regulations.
Good internal communication and detailed planning prevent conflicts and ensure business continuity.
Our approach
At GM Tax Consultancy, we know that every entrepreneur is different. That is why our support in partial retirement processes focuses on:
- Analysing your personal and financial situation.
- Reviewing the company’s financial and tax situation.
- Designing a transition plan tailored to your objectives.
- Drafting contracts, shareholder agreements and legal documents to guarantee security.
- Optimising taxation to maximise your net income.
Our goal is for you to partially retire with the peace of mind that everything is under control.
Partial retirement does not mean abandoning your company, but adapting it to the stage of life you are in. There are flexible formulas that allow you to remain involved, reduce the management workload, optimise your taxation and guarantee business continuity.
Our experts offer you a personalised plan so that this transition is orderly, safe and beneficial for both you and your company.
Because retiring halfway is also a way of gaining freedom without giving up what you have built.
Reviewed by Gerard Valldeperes Vilanova
