Owner Managed and Family Businesses
An owner managed business is a business that is owned by its key managers. A family business is a business that is owned by members of the same family or by a number of families. Owner managed businesses and family businesses each have their own dynamic which is different from corporate entities having other ownership structures
Advising Family Businesses
Family businesses have their own complexities. George Green understands them well. Over a century after our own business formation, we still have a family member of our founder as one of our partners. Advice to family businesses is part of our DNA.
Retaining the family business may represent sound wealth management, but, as the wealth cascades down the generations, tensions may arise among family members who may have differing levels of involvement in the business and who may derive different levels of financial reward.
The emotion of the family relationship may spill over into the business and a degree of sensitivity around emotional issues is often as important as an ability to deal with some of the complex legal issues that may occur in this context. Our corporate and private client teams work closely together to protect and nurture wealth and to minimise conflict that may often erode family wealth.
Family businesses often require bespoke articles of association and shareholders’ agreements . These documents have legal effect and can be contrasted with family business charters adopted by some business, which may articulate values and principles as a framework of expectation, but be of little or no legal effect. We can advise you upon the most appropriate solution for your family business and adapt this and as family circumstances evolve.
Advising Owner Managed Businesses
Some managers struggle to adapt to business ownership and the transition from employee to proprietor can be difficult. It is important that there is an alignment of expectation between owner managers and this is usually underpinned by appropriate service agreements to deal with employment relationships and robust constitutional documents to deal with ownership and management issues.
Failure to adequately document these relationships often leads to performance management issues and conflict between members of the management team, which can prove to be a distraction and costly.
Inevitably, not all ventures will work out as planned but proper documentation should provide an appropriate level of clarity as to how deal with such issues as the exit of a manager who is underperforming.
The dynamic of most businesses will change over time and the most successful business adapt to change. We can advise as managers approach retirement where they may be a need to undertake succession planning or where there may be a need to provide an incentive to the next tier of management.