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How can you future proof your family business?


Each family business is different, often relying on trust and personal relationships to succeed. However there are legal steps you can take which can help protect the future of your family business and its members. SME Solicitors recommend the following:

  1. Consider your business structure. For example a family business run as a partnership may benefit from becoming a limited company (or LLP) so that your liability to third parties is capped, and so that any succession does not affect your business contracts.
  2. Consider a formal partnership agreement or shareholders agreement. This is a private contract which can cover issues such as how decision making will take place, how disputes can be resolved, and what happens if a family member dies, loses capacity, or wishes to leave the business.
  3. Put in place service contracts or contracts of employment for your family members who are engaged or employed in the business, setting out their roles and responsibilities.
  4. Consider succession planning. Founding members may wish to consider bringing in the next generation of family members gradually through share options, or initially as a minority partner or shareholder. You may want to ensure on your retirement that your family can continue the business so you need to make sure they can purchase your share of the business and take over the reins by that time.
  5. Consider tax planning – our private client team can help you with tax planning, as well as with wills, powers of attorneys, and trusts.
  6. Look at your business property. For example, if you own the building but your family business is a company or a partnership with other family members, you may want to put in place a formal lease from you to your business. Likewise, if you run your business from leased premises, is the lease in the name of the family business or in your sole name?

For assistance, please contact Louise Adams at SME Solicitors on 01905723561 or louise.adams@smesolicitors.co.uk

Added: 06 Jun 2017 13:29


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