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The succession is only complete if the ownership of the family business is also transferred.
One might erroneously think that the transfer of ownership is less emotionally-charged than the transfer of the management. In many cases, however, the opposite is the case. Here too tensions can develop, for example as a result of the question of who from amongst the children will be the owner after the succession, or at what value or price the ownership of the family business will be transferred.
In the transfer of the ownership, a balance among the notions of justice, involvement and manageability is important.
Source : Flören, 2003
Most parents regard justice as an important pillar on which a succession arrangement must be based. The inheritance laws of many countries reflect this: it limits the possibilities for giving particular advantages to one specific child, in this case the successor. If all children inherit (the shares in) the family business, as shareholders they are legally involved to an equal degree because they have equal voting power in the general meeting. An important prerogative of this body is the appointment of directors, so that the successor can soon find himself under threat of removal. Conflicts can develop which lead to the unmanageability and even the downfall of the family business.
Various techniques can be applied in order to avoid this. First of all, a properly elaborated governance plan can offer a remedy. This will lead to each shareholder playing the role which is attributed to him as a result of agreements.
Jozef LIEVENS is a lawyer and partner in the Eubelius law firm. He is managing director of the Institute for Family Business and FBNet Belgium. He teaches a family business course at the European University College Brussels (EHSAL). He is a Fellow of the American Family Firm Institute. His website is: www.familiebedrijf.be |
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