In a recent article in The Globe and Mail, Beverley Smith
recounts a rare tale of family business survival in which a Halifax
seed company is still operating in the fourth generation.
In fact, it is reported that family business survival is a rare
phenomenon in Canada with only about 30 percent of family-owned
businesses surviving into the next generation. By the fourth
generation, only three percent are still operating. Key lessons
learned: avoid multiple decision makers and sibling dominated
boards, get outside help (advisory boards, independent directors,
competent executives, et cetera) and invest in governance
and succession planning.
In my experience, I have seen many otherwise successful family
businesses falter following the passing of the torch due to
insufficient planning and communication and cumbersome ownership
and management structures. I have also seen many successful family
businesses flourish and grow when control is properly passed to the
next generation. An important factor in those success stories was
clearly identifying how the family business would be governed, who
the key decision maker would be and hiring capable management to
fill the gaps and bestow confidence on the non-management family
It is also important to engage professional advisers with
experience in this area in order to share best practices, provide
an objective perspective and construct a functional ownership and
governance structure. A modest upfront investment in succession
planning will go a long way to creating an enduring legacy.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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