Starting out in business is difficult; starting out in a family business can be even trickier.
We advise lots of family businesses to help regulate their operations, the relationships between family members and when there is a breakdown in those relationships.
It is important to have the right documentation in place from out the outset e.g. a shareholders’ agreement or your employment contract with the company.
We use a checklist of questions which family members should be asked to address as part of the process which includes queries about long term strategy, investment, ownership, what happens on death, bankruptcy, illness or marriage, values of the company, dividends, employment, key business decision making power and how should disputes between family members be resolved.
We have set out examples of what we ask family members about long term strategy for the business:-
- Should the business always be wholly owned by the family?
- Would you ever, for example, be prepared to contemplate external investment into the business?
- Would you ever be prepared to contemplate a sale of the business?
- If yes: how far in the future?
- What growth in the business would you like to see in the medium term and long term?
- What level of investment is required to achieve that growth?
- Can this investment be found from within the family or the business?
- Is the family united in its vision for the future of the business?
If you require any advice about your business or your role in a business please contact Sarah Burrows E: Sarah.Burrows@edwardsandcompany.co.uk T: 028 9032 1863