Business family where assets are scattered

One of our client is a joint business family. Their assets were randomly distributed amongst various family members. Recently, when a member of the family asked for a split, the entire family got entrapped in the discussion and confusion, resulting in a lot of disharmony amongst all of them.Ladderup Trustees worked with them and helped them in creating a comprehensive Succession Plan for their family as well as business in order to avoid conflicts in future.

Succession Planning in case of business families is a very critical step to ensure the continuity and growth of the business, generation after generation. Every family business faces problems when the family size grows, and the older generation wishes to accommodate every family member into the business. Even though each member is responsible for certain functions in the business, there is no demarcation of the ownership, management and responsibilities. Being a joint family structure, the expectations of the newer generation may also vary in terms of ownership in the business, the roles and responsibilities and the income or benefit that each member can enjoy from the business.

Thus, in Business families where assets are scattered, Succession Planning ensures that families retain control over their businesses and there is a smooth transition of roles and responsibilities between generations of families. It balances the needs of the businesses with the interests of the family members. There must be a mutual understanding of the core values and vision of the organization. A talent development plan in place along with a clear demarcation of shareholdings, roles, responsibilities and compensation structure in addition to the decision making powers.Thus, when business of a family has grown over the years and when it comes down to the next generation, an effective succession planning becomes very important for further growth with minimal hassles and to avoid dispute in future.

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