Family Business update: the perils and pitfalls of "Keeping it in the Family"


It is inevitable that when an individual or a family has devoted a lot of time and effort in developing their business or enterprise, they will wish to pass on the fruits of what they have achieved to the next generation. Just ask President (at the time of writing) Mubarak. But any desire to benefit the next generation through a seamless succession is meaningless without careful planning, and without the flexibility to address unexpected events (be they widespread public demonstrations against your rule, or something a little more low-key).

Two recent cases have served to illustrate some of the dangers that can be associated with succession planning for a family business that has been less than comprehensive.

The first case is Vinton v Fladgate Fielder [2010] EWHC 904 (Ch) which illustrates the extent to which it is important to keep estate planning constantly in mind, not only when preparing the Wills of the current owning generation, but also in making other commercial arrangements in relation to the business.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Richard Milner | Attorney Advertising

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