Sound Advice: Pitfalls To Avoid When Operating a Family-Run Business

Family-owned businesses face unique issues—succession planning, marriages and divorces, complicated relationships—as well as routine issues that emerge around turf battles, shareholder control, compensation structures, and processes for strategic decision-making.

Without proper documentation in place to help address these and other issues when they arise, the family-owned business is at risk from an operational, management and financial perspective. Regardless of its legal structure (e.g., corporation, limited liability company, or partnership), the family-owned business can avoid many problems down the line and better position itself for success if relationships between business owners are carefully documented.

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