Family businesses
A family business combines business, assets and relationships. That is why important decisions should not be considered separately.
In a family business, ownership decisions have consequences that go beyond the day-to-day operations of the company. They can affect the security of assets, the responsibility of family members, the position of successors and the possibility of further developing the business.
However, not every family business is facing succession, reorganisation or another breakthrough change. Many companies primarily need ongoing support in legal and tax matters, provided with regard to their ownership structure, family character and long-term plans.
I support owners of family businesses in putting such decisions in order. I combine the legal and tax perspective with an understanding of the business structure, ownership relationships and the family's plans.
I do not start with a ready-made solution. First, I establish what the business currently needs: carrying out a specific change, resolving a particular issue or regular support in its day-to-day operations.
A family business is a special kind of organisation
Three perspectives meet in one business
A family business is at the same time an enterprise, the property of specific people and part of a family's life. Each of these perspectives may have different needs and a different time horizon.
Your situation
01
Business
Growth, management, financing, security.
The business needs stability, capital, efficient management and room to grow.
02
Owners
Control, responsibility, assets, strategic decisions.
The owners want to keep control over key decisions, protect the value of the business and use the assets they have built up responsibly.
03
Family
Continuity, relationships, successors, future generations.
The family may need security, clear rules, the preparation of successors and a way of resolving differences before they start to affect the business.
As long as the goals of these three areas are consistent, many decisions seem relatively simple. The difficulty arises when the needs of the business, the owners and the family begin to diverge.
It is precisely at such moments that the situation needs to be put in order and the way forward chosen consciously.
When it is worth taking a broader view
Important changes rarely start with a ready-made plan
Owners of family businesses often come not with the name of a specific solution but with a question, a doubt or a feeling that the current way of operating needs to be put in order or requires ongoing support. A conversation may be particularly needed when:
The business is running well, but there is no agreed plan for its ownership, management and responsibility over the coming years.
It is not yet known whether the business will be taken over by the next generation, the current managers, an investor or another partner.
Family business successionChildren or other family members start working in the business, receive shares or prepare to take on management roles.
It becomes necessary to define roles, responsibilities, rules of remuneration and participation in decisions and profits.
Preparing successors and owners for changeSome successors want to run the business, while others prefer only to share in ownership or to benefit from the family's assets in another way.
It may be necessary to separate the right to economic benefits from the day-to-day management of the business.
Family governance and rules of cooperationThe business has grown, further companies have been set up, real estate, investments or new business lines have appeared, but the legal and ownership structure still reflects an earlier stage of operations.
This can make management harder, increase risk or complicate a future transfer of ownership.
Business structure and growthOne person wants to keep developing the business, another is considering stepping back, selling shares or passing them on to their children.
A difference in goals does not have to lead to conflict if it is named early enough and translated into clear rules.
Family governance and rules of cooperationReal estate, shares, financing and the owners' personal guarantees form a system in which changing one element affects the others.
Before making a decision, a joint analysis of the legal, tax and property consequences is needed.
Asset planning and protectionThis may be a planned sale of part of the business, a reorganisation, an investment, a dispute between shareholders, a tax audit, a change in the family situation or a sudden need to hand over responsibility.
Even if a matter requires quick action, it is worth separating urgent decisions from those that should be prepared over a longer period.
The business is stable, but the owners, the management board, the accounting team or the finance department regularly need support with legal and tax decisions. In such a situation, the value lies not only in answering a single question but also in knowing the history, structure and direction of development of the business.
Ongoing legal and tax advisory
Not every family business needs the same thing
The solution should follow from the goal, not the other way round
A family foundation, a reorganisation of a group of companies, a will, a shareholders' agreement, putting the rules of representation in order or changing the tax model can all be valuable tools.
However, none of them should be an automatic starting point.
It is not about creating the most elaborate structure. It is about a structure that the owners understand, accept and are able to apply in practice.
Businesses that look similar may need completely different solutions. What matters includes:
- the ownership structure
- the number of owners and successors
- the readiness of the next generation to take on responsibility
- the role of people outside the family in management
- the composition of the assets and how they are used
- development or sale plans
- the financial needs of the owners and family members
- existing obligations and risks
- the legal and tax consequences of each option
That is why it is worth starting cooperation by understanding the situation and the actual needs, rather than by choosing a document, a legal form or a tax solution. Sometimes the result will be a larger project, and sometimes ongoing support in making and implementing further decisions.
Three areas we put in order
We put decisions in order in three connected areas
01Business, family and assets
I help plan the relationship between ownership of the business, responsibility for running it and the security of the family and its assets. I also support owners in day-to-day decisions on exercising ownership rights, rules of cooperation and the use of assets.
02Business structure and growth
I support owners in designing a structure that reflects the current scale of the business, allows decisions to be made efficiently and does not limit further growth.
03Tax and security
I help identify the tax consequences of current and planned decisions, limit risks and build solutions that can be applied in day-to-day operations.
This area includes, among other things:
Three possible directions for a family business
The future of a family business can take different forms
Not every business has to be passed on to the next generation. Not every successor should take over management. Not every owner wants to remain involved in the business to the same extent.
Three general directions are most often considered:
Possible benefits
Keeping control, value and the identity of the business within the family
Limitations and risks
Requires prepared successors, clear roles and the acceptance of the other family members
When to consider it
When the next generation wants to and is able to take on responsibility
The choice of direction does not have to be made, and almost never is made, in a single conversation. Often the owners' expectations, the successors' possibilities and the actual needs of the business must first be separated.
Only then can it be assessed which legal and tax solutions will support the chosen path.
What the process of putting the situation in order looks like
From an unclear situation to an informed decision
01
We name the right question
The starting point is not always succession, a family foundation or a reorganisation. First, we establish which decision really needs to be made and whom its consequences will affect.02
We identify interests and constraints
We analyse the needs of the business, the owners and the family. We check where their goals are aligned and where rules or a compromise will need to be worked out.03
We put the assets and structure in order
We establish which assets belong to the business and which to individual people, and what legal, financial and tax dependencies link the individual elements.04
We compare scenarios
We prepare possible directions together with their consequences. We assess not only legal and tax feasibility but also the impact on management, ownership and family relationships.05
We set the order of actions
Not every change has to happen at once. We create a plan that identifies urgent decisions, preparatory steps and solutions that can be implemented later on.06
We implement and check that the agreed rules work
I prepare the documents and coordinate the implementation of the agreed actions. If necessary, the solutions adopted can be reviewed periodically as the situation of the business or the family changes.
In a project concerning succession, reorganisation or another complex decision, cooperation may follow the stages above. Ongoing advisory takes a simpler form and is based on regular consultation on matters, taking into account the previously learned context of the business.
Who I talk to in a family business
Each person may see the business from a different perspective
Depending on the situation, the following may be involved in the process:
- founders and current owners
- owners' spouses
- successors active in the business
- family members who do not work in the business
- shareholders from outside the family
- the management board and key managers
- existing legal, tax and financial advisers
Not every conversation has to take place in a full group straight away. Sometimes the process begins with an individual conversation with an owner who first wants to put their own goals in order. In other cases, the right solution will be a joint meeting of several people.
The choice of participants and the scope of information shared should take into account the nature of the matter, family relationships and the need to maintain confidentiality.
Involving the family in the process does not mean that every person has to take part in every decision.
What cooperation can result in
The result is not always a single document
Depending on the situation, the result of cooperation may be:
- an organised diagnosis of the situation of the business and its owners
- a map of the most important risks and dependencies
- a comparison of possible scenarios
- a plan for the succession of ownership and management
- a concept for the asset or ownership structure
- a family foundation project
- a plan for the reorganisation of companies
- rules of cooperation between family members
- a shareholders' agreement or a package of other documents
- a plan of action in the event of the owner's sudden absence
- an implementation schedule
- ongoing legal and tax recommendations supporting specific decisions
- ongoing support for the owners, the management board, the accounting team or the finance team
- coordination of current issues that require combining the legal and tax perspectives
- a model of ongoing legal and tax advisory
Documents are important, but their value depends on whether they reflect what has actually been agreed and can be applied in practice.
Frequently asked questions
Does every family business need a succession plan?
Every business should at least identify the consequences of a situation in which its owner can no longer make decisions or wishes to reduce their involvement. This does not mean that every business immediately needs an extensive succession process.
The first step may be to identify the most important dependencies and the measures that safeguard the continuity of the business.
Is a family foundation the right solution for every business?
No. A family foundation can be used to accumulate and manage assets and to provide benefits to beneficiaries, but its usefulness depends on the owners' goals, the type of assets, the structure of the business and the family's plans.
Before making a decision, the costs, obligations, limitations and tax consequences should also be analysed.
What if the children do not want to run the business?
The absence of an operational successor does not have to mean closing the business or selling it immediately. It is possible to separate ownership from management and entrust the running of the business to professional managers.
Such a model, however, requires clear rules on supervision, decision-making and the use of the profits generated.
Isn't it too early to talk about succession?
A conversation does not mean an immediate transfer of control or ownership. It does, however, make it possible to identify the available options, prepare the next people for new roles and reduce the need to make important decisions under pressure.
The plan can be built in stages and updated as the situation changes.
Does the whole family have to take part in the conversations?
No. The scope of participation depends on the stage of the process and the type of decisions being made. Cooperation may begin with a confidential conversation with one owner, and other people can be involved at the appropriate moment.
Can you work with the business's existing advisers?
Yes. Owners often already rely on an accountant, a lawyer, a tax adviser or a finance director. Where justified, the cooperation can be organised so as to use their knowledge of the business and avoid parallel, inconsistent actions.
Do you also work with businesses that are not currently planning succession or reorganisation?
Yes. A family business may need ongoing legal and tax support regardless of whether it is preparing a major change. Ongoing cooperation may include advising on contracts, transactions, ownership and corporate decisions, supporting the accounting or finance team and assisting in dealings with the authorities.
Its scope depends on the scale of the business, how often matters arise and the expertise the business already has in-house.
You do not need a ready-made plan to start a conversation about the future of your business.
The starting point may be a specific decision, a general doubt or the need to calmly put the situation in order.
During the first conversation we will establish what the matter concerns, who should take part in the further process and what information will be needed to assess the possible directions.
If the matter requires the cooperation of several specialists, I will propose how to organise it. If at a given stage there is no need to implement an elaborate solution, this should also be clear from the conversation.