Family owned businesses are quite common and can have their own unique set of issues to address such as family rivalries, succession and tax planning, marriages and separations, family conflicts, illness, etc.
To avoid potential legal issues that may arise from family-owned businesses consider these tips:
- Structure the business as an entity (Corp., LLC, Partnership). This makes it easier to structure the business should there be times of transition.
- Owners should come together regularly to discuss goals, vision and planning.
- Create a succession plan to accommodate the goals set as it relates to future ownership and control.
- Develop a formal written policy that addresses the permitting or restricting of family members and spouses roles in the business.
- To reduce future misunderstandings or faltering memories, keep written records like in any business, especially of arrangements among the family.