Insulate your family and your business from problems by retaining a good quality lawyer.
Family businesses are an incredibly important part of commerce in the UK. From small father and son outfits to large organisations providing employment and development, family businesses can leave legacies not just in families but in the communities they work in.
For all the wonderful things they bring to our economy, certain complicating factors can arise when running a family business. There's an old adage that says never mix money and family, and while we wouldn't agree with that, it's probably a good idea to hire a good, empathetic and experienced lawyer to work with.
In this short blog, we're going to give you a quick-fire list of reasons you need a good lawyer when running a family business.
1 – The line between 'Personal' and 'business' is blurred
For most people, it's easy to separate the personal from the professional. In households, marriages and families, each member often goes their separate way professionally, leading to a clear break between the two lives they lead.
In family businesses, you don't get a clean separation of the professional and the personal. Every family business will be familiar with the Sunday dinner conversation which soon turns from discussions about family life to business matters in the blink of an eye. This isn't necessarily an issue until things go wrong or issues arise. It's at this stage that relationships can become strained, or the relationships themselves can lead to bad business circumstances.
Having an empathetic lawyer on hand to help you navigate tricky waters can help you protect your business and your relationships, leading to a happier home life and a more prosperous business.
2 – Succession planning and inheritance can cause business problems
When a business owner steps away, retires or passes on, the issue of who shares pass to, who the running of the business passes to and how that might affect other shareholders rears its head.
We recently wrote about the importance of family businesses having a will in place and we're going to drive the point home again. Having a clear account of where your shares should go when you pass on, whether that be in your will, your company's Articles of Association or your Shareholders' Agreement, could be the difference between an already trying time becoming worse and a business that's resilient to succession-based issues.
A lawyer experienced with family business based issues will help you set your affairs in order to protect your business and your family.
3 – Employment law can be more complicated in a family business
In certain aspects, running a business becomes more complicated when working with family. How do you enforce an employment contract for a family member for example? How do you fire or reprimand an underperforming relative? At the other end of the spectrum, how are you protected from shady employment practices if your boss is your uncle?
With a lawyer who understands you and your family business, these choppy waters can be more easily navigated.
4 – Family members with different approaches to risk can make decision making hard
When several family members are in charge of the running of a business, there can be conflicting views on what the best direction for the business is. This can be particularly difficult where there is equal shareholder power. With the assistance of a neutral lawyer, a family business can work towards moving in the same direction as well as helping set out a decision-making process and framework going forward.
5 – A trusted lawyer can provide balance and tell you what you need to solve problems
A good family business lawyer's knowledge is broad. Whatever circumstances you find yourself in, they'll be able to provide the calm, balanced advice you need and will be perfectly placed to tell you what and who you need to navigate a problem.
By having one legal advisor you trust, who understands you and your business, and who shows empathy, care and diligence towards you and your family business, you grant yourself an invaluable insurance policy against issues that could derail your business plans and your personal relationships.
Family business law isn't a "body of law", it's a relationship. To go one step further, a family business lawyer isn't just a lawyer. They're an unbiased arbiter of family politics who will work hard to protect you from legal issues and preserve your familial relationships.
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.