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Advising the Family Owned Business

Offers practical advice to lawyers on dealing with family business clients.
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£85.99
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ISBN/ISSN: 9781846615573

Product description

Why should you buy Advising the Family Owned Business

This title offers practical advice to lawyers (usually solicitors in small and medium-sized practices) on dealing with family business clients. No business starts as a family business. It becomes one when changes need to be made to the structure or ownership of the business. Such businesses are the backbone of the British economy. Problems are often rooted in family issues rather than commercial issues and therefore advisors, be they legal financial or management need to be attuned to some of the complex family issues as well as the commercial issues.

The International Centre for Families in Business (ICFIB) which advises family businesses working alongside lawyers and accountants has seen a marked increase in interest from law firms in the family business sector. It is an area of business highlighted by the Coalition Government as a growth sector, and collaborative law is also on the government?s agenda.

The purpose of this book is to offer practical advice to lawyers (usually solicitors in small and medium-sized practices) on dealing with family business clients. It will also explain the dynamics of a family business and why they should be approached in a different way to other corporate entities.

Contributors

Claire Ainley, Compliance Partner, Veale Wasbrough Vizards, Emma Bradley, Tax Partner, Veale Wasbrough Vizards, Andrew Commins, St John’s Chambers, Edward Cumming, XXIV, Old Buildings Lincoln’s Inn, Ruth Dooley, Hazlewoods Accountants, Oliver Early, David Emanuel, Veale Wasbrough Vizards, Paul Esmiley, Foot Anstey, Peter Griffiths, Hazlewoods Accountants, Michael Halsey, Veale Wasbrough Vizards, Katie Hanson, Veale Wasbrough Vizards, Julia Hardy, Veale Wasbrough Vizards, Samantha Hickman, Veale Wasbrough Vizards, Richard Hiscoke, Veale Wasbrough Vizards, Professor Andrew Keay, Leeds University, Andrew Marsden, Commercial Chambers Bristol, Steve McGuigan, Veale Wasbrough Vizards, Victoria McMeel, Bevan Brittan LLP, Jos Moule, Veale Wasbrough Vizards, Natalie Payne, Mackrell Turner Garrett, Irene Pedder, Chair, Clark’s Shareholder Council, David Pierce, D R Pierce Consultancy Limited, Emma Rudge, Michelmores LLP, Jessica Scott-Dye, Veale Wasbrough Vizards, John Tucker, Family Business Consultancy, Sarah Want, Veale Wasbrough Vizards, Matthew Welch, Paula Williams, Veale Wasbrough Vizards

Foreword

There is something unique about family businesses – from the local shopkeeper to the international corporation. The ethos of a family business is special. Because the business and the product it sells is attached so intimately to a person and their relations, I believe that family businesses look at the world differently than other businesses. Read the full foreword...

Preface

This book would not have come into being without the help of a great number of people.

Most of the thinking included in the book is the result of countless hours of discussions with family business clients and colleagues from across the family business movement. Read the full preface...

Introduction

Why this book?

The family business is the oldest and most common form of economic organisation on the planet. A selection of the evidence supporting this claim is contained in chapter 1 (Introducing the Family Owned Business).

Even so neither the management and behavioral professions nor the academic world had, until recently, paid much attention to family businesses as a distinct category. This has changed significantly over the last thirty years or so. During this period a whole raft of writing, theorising and thinking has taken place about family business issues. Read the full introduction...

Product Reviews

"A valuable addition"
by
This hefty tome, coming in at nearly 1000 pages, endeavours to examine the complex dynamics of the family owned business in a new way. The book’s Introduction notes that it is only relatively recently that the family business has been regarded as a distinct category: rarely will one find reference to them separately from non-family businesses, even though their aims, needs and operation can be very different. The Introduction states that, “Working on the basis that family business advisors, individual professions and specialist teams within those separate professions inhabit separate worlds, the hope is that this book can help to provide a bridge, or rather a number of bridges, between those worlds.” Consequently, it is less a specifically legal text than one which explores everything from family dynamics through to governance, succession and dispute resolution, driven by the needs of this very particular kind of business. Content The book is divided into 6 parts, between them containing 26 chapters. Part A covers the family business and its dynamic in a general, rather than a legal or technical, way. It provides the reader with a useful introduction to all the concepts and terminology that are used in the rest of the book, as well as to 5 case studies that are used throughout. Family business specific themes, such as sibling rivalry and the importance of particular characters and relationships within a family, are considered, and the section explains tools, models and theories that will be used in discussing family businesses. Among these is the ‘three-circle model’, described as the ‘foundation stone’ of family business thinking. The three interlinked circles encompass business, ownership and family and are used to highlight the way the three overlap and intersect in a family business. Discussion of these three areas then forms the next three parts of the book. Part B’s 7 chapters look at the business aspects of the three-circle model — business structure and tax basics, employment considerations (both family/ non-family employees), management succession, directors’ duties, how to hold property. Part C, the next 6 chapters, is one of the longest Parts of the book. It covers ownership aspects of the three-circle model and addresses ways in which a family business can be held: using companies, partnerships and trusts. It goes further, however, in acknowledging that a significant issue in ownership is the question of succession, of passing on ownership of the business. Part C therefore also contains chapters on selling a family owned business, ways of managing and implementing succession, and tax issues. The book does not aim, though, to cover tax in any detail — tax issues and estate planning are comprehensively covered in many technical books. The third sector of the three-circle model is dealt with in Part D, which looks at matters pertaining to the family itself — governance, matrimonial issues and inheritance disputes. This Part highlights, perhaps more than other, that family dynamics are inextricably entwined with business and ownership issues, and are essentially at the heart of all dealings with a family business. Disputes of other kinds are considered in Part E, which provides a fairly detailed overview of remedies available to shareholders in family companies. The author notes that it is perhaps this Part of the book that will most easily persuade a family that good governance is vital, as the best way to prevent any of the many potential disputes discussed from arising! Part F contains the final 2 chapters of the book, looking at the family business advisor. The first chapter considers the increasing role of a family business consultant, addressing both what they are and what they can contribute to family discussions of business matters. The second chapter is aimed specifically at those advising a family business client, encouraging professionals to consider whether their advice is being tailored for a family business, as opposed to a business in general. Structure & Layout The introductory overview of the nature of a family business, and the tools, models and theories used in discussing and explaining how such businesses operate, helpfully set up the structure the book then follows. It enables the author to use the ‘three-circle model’ to categorise the issues that need to be addressed in dealing with a family business. Once this has been done, the book’s final sections look at more ‘external’ matters, such as dealing with disputes and working with advisors. Each of the 6 Parts is marked in grey on the page edges, which makes it easy to return to a section after looking elsewhere in the book. The reader very quickly becomes familiar with the Parts of the book and what is contained within each, made more accessible again by a clear contents section and chapter headings on every page. A table of cases is provided. Some of the cases cited in the book will be familiar landmark cases, but many are specifically used because of the ‘case study’ element they provide, their facts (and the implications of them) being as instructive as the legal decisions for the purposes of this book. There are also lists of statutes and statutory instruments at the beginning of the book, followed by a table of abbreviations, which could be very useful for those unfamiliar with the many acronyms that the business and legal worlds combined can provide. In an acknowledgement of the potentially diverse readership of the book, an appendix contains family business terminology (e.g. copreneurs, family assembly, insiders/ outsiders, systems theory, triangulation) and legal terminology (e.g. articles, claimant, common law, equity). Diagrams, charts and tables are used throughout the book. These, combined with the many case studies used, provide the reader with an additional helpful way to understand the information being communicated, and to apply the content to their own, or their client’s, situation. Clarity & readability The book is accessible, and presents itself as a wide-ranging guide and point of reference for those dealing with family businesses. Topics are covered in clearly delineated chapters, each chapter containing user-friendly sub-headings, and it is a straight forward matter to home in on pertinent information very quickly on opening the book. The use of case studies and pictorial/ graphic representations of the matters discussed throughout the book is a valuable addition, allowing concepts and complicated family/ business relationships to be digested more easily. Relevance to practitioners The book states that it is for “anyone with an interest in and involvement with family owned businesses”, but it has been written primarily with a legal audience in mind. This is not, however, a legal textbook in the usual sense: it aims to help the reader understand the dynamics and issues facing family business clients and to help professionals consider how their services can be modified to best meet the needs of those clients. For any practitioner who spends a significant amount of time working with family businesses, this book could provide a valuable resource for developing or expanding an understanding of how they operate, their unique dynamics and the additional layers of complexity that are involved above and beyond advising non-family-run commercial enterprises.

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Table of contents

  • Introduction
  • The Family Owned Business and its Dynamics
    • An Introduction to the Family Business
    • Themes
    • Tools, Models and Theories
  • Business Matters
    • Tax Basics and the Family Business Structure
    • Employing Family Members
    • Non-family Employees
    • Management Succession
    • Directors’ Duties
    • The Family Business Name
    • Property and the Family Firm
  • Ownership
    • Ownership Overview
    • Selling the Family Owned Business
    • Family Business Partnerships
    • Family Business Trusts
    • Ownership Succession
    • Tax and Family Business Ownership
  • Family Matters
    • Governance and the Family Owned Business
    • The Family Business and Marriage
    • Inheritance Disputes
  • Family Business Disputes
    • Family Business Shareholder Disputes – Overview and Key Issues
    • Unfair Prejudice and the Family Company
    • Just and Equitable Winding Up
    • Derivative Claims and the Disgruntled Family Member
    • Shareholder Disputes
    • Remedies, Reasonable Offers and Costs
  • The Family Business Advisor
    • Process Consulting and the Role of the Family Business Consultant
    • Advising the Family Business Client
  • Appendices


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