CLM Solicitors - Business Services - Whose family business is it anyway?

Whose family business is it anyway?

Just click on a link below

Harmonious or a Headache?

Family Businesses – Sell on, Pass on, Carry on, or Die…

Your Will and Your Business Assets

Businesses Not Aware of Domain Name Threat

Whose family business is it anyway?

Is Your Family Business on Track?

Family Business Exit Strategies

MEET THE TEAM

Hemant Amin

In the UK, 75% of registered companies are family businesses yet more than half find it difficult to plan a handover of the business and only 30% survive to the second generation. Hemant Amin, solicitor with Charles Lucas & Marshall examines the problems peculiar to family businesses.

What should a business owner do to plan for the future? Should he or she sell the business, pass it on to a family member or simply carry on until retirement?

‘The Family Business Centre’, a new service from Business Link, supported by a team of local lawyers and accountants, has been put in place to help advise the SME or owner managed sector - not only on technical problems which arise when one looks to implement options - but also to look at and help family businesses address the complex issues they face.

The Family Business System

There are many competing interests in such a system. Traditionally, only the ‘business’ and the ‘family’ have been identified as the key components of a family business but with the result that there has been a tendency for: -

professionals to say, ‘I advise the business and not the family’ and
the business owner to say ‘leave the family out of it’.

The fact is that the family business and the business family comprise three key groups: the family, the business and the owners.

By looking at all three groups it helps to identify the range of interests in the Family Business System. The groups are independent but there is invariably an overlapping of interests:

The Family - in any family business there are members who are involved in the running of the business and those who are not but are affected by the business.

There may be family members involved as ‘employees’ but they may not be ‘owners’. They may have ambitions towards ownership and management. On the other hand, they may have no desires at all for responsibility. There may be a need for management development.

The Business - will comprise management and employees and a good number may not be part of the family nor owners. Their needs are to see the growth and profitability of the business for income, job security and career prospects. Management may also be interested in acquiring an ownership stake. On the other hand they may not want ownership - which could be a big problem for a successful business where the current owner has no natural successors. Why are those running the business not interested in ownership - what are the issues?

The Owners - for a controlling owner business development can result in partnerships and/or a limited company with shareholders. Owners may not work in the business. They may be external investors - business angels, venture capitalists, banks.

For more information on ‘The Family Business Centre’ and for advice on family businesses in general, contact Hemant Amin on 01635 521212 or hemant.amin@clmlaw.co.uk