Is Your Family Business Set Up For Success?
Building a successful family business is one thing. Making sure it stays that way for the next generation is another.
We've worked with many family businesses where everyone gets along... until questions arise about who makes decisions, who takes over, or what happens when circumstances change.
The reality is that many of these issues can be avoided with the right planning long before they become problems.
In this short video, Ross shares one of the simplest ways family businesses can protect what they've built and create certainty for the future.
If you're part of a family business, this is two minutes well spent.
Working with you,
Ross Millen & The Millens Team
Ross Millen:
Hi. We're often asked to help people out in family businesses where they've got a bit of an issue because maybe the parents have set up a company, some of their children work in the business, and so they want to make sure that everything works out as they intended, that everyone knows what their roles are, what their positions are, what their entitlements are, who may be the managing director, who may be other directors.
Now, sometimes this can be organized in a shareholder's agreement, but we've noticed that a lot of families perhaps don't prefer to have a shareholder's agreement. So what's another mechanism that they can use? And this could be if they're operating through a company, and let's face it, most businesses do, then they can have something in the constitution of that company that sets out certain rights, and they can provide that those things can't be changed except with a special resolution that requires 75%.
So if there are several family members with shares, basically you have to get almost unanimous approval or a very high level of approval to change the constitution and amend it. So you can entrench things in the company's constitution. This could be like who's managing director, and on what basis? When will they cease to be managing director? How many votes certain people have for their shares? Maybe there'll be different classes of shares for different parts of the family.
So if you've got a family business and you're wanting to put in place a plan for the future that's going to stay in that shape, remember to talk to us because we can help you mold your constitution to make sure that your company is fit for purpose and fulfills your intentions for the family business. So remember, I'm Ross Millen. Contact me or anyone else at Millens. We're here to help you with your commercial needs.