Shaping Profit Participation Rights and Silent Participation as Employee Share Ownership from a Tax and Financial Perspective (Steuerliche und finanzwirtschaftliche Aspekte bei der Gestaltung von Genussrechten und stillen Beteiligungen als Mitarbeiterkapitalbeteiligungen)

Abstract

In the context of employee share ownership profit participation rights and silent participations allow to combine the advantages of self-financing and external financing. In our paper we analyse from a tax and financial perspective under which circumstances these participation forms provide profitable capital procurement for the company and simultaneously an attractive investment opportunity for the employees. We identify the most important value drivers and derive ranking orders of the alternative financing methods depending on various factors. Finally, we determine a range of optimal company grants to the employees ensuring attractive participations for both parties.