WSB on the „participation right“ - Celebrating without having a say?

Imagine it's your birthday and there's a party for you.

However, they are not allowed to decide who comes, what food is served or what music is played.

You are only allowed to have fun - after all, you have the „right to enjoy“!

Sounds strange? But it is - or at least something like it.

Profit participation rights are a special form of corporate financing:
- You invest capital in a company,
- may participate in profits or liquidation proceeds,
- have no say or voting rights.

Sounds like the party described? But of course there are some special tax features.

Important to know:

- For the company issuing the profit participation rights, this is debt capital for tax purposes (like a loan).
- Profit distributions are to be treated as non-tax-deductible expenses.
- The (private) investor pays tax on his income as income from capital assets.

Are you still in a party mood? 😉

In any case, we tax advisors know how to keep you in a good mood, even with profit participation rights. 😊

👉 Want to find out more about profit participation rights? Talk to us - we'll shed some light on the technical jargon!
www.wsb-berater.com/kontakt

#Corporate law #Corporate finance #Capital investment #Miscellaneous technical terms #TTax advice #WSB