Family Businesses

News & Analysis as of

Defining the Role of a Board Chair

The prior Family Business Advocates blog post provided an overview of the different legal roles that shareholders, directors, and officers play in the intersection of ownership and management of a company, but how does a...more

Do You Need to Do Business with Your Co-Owner’s Children? It Depends on the Language of Your Agreements.

Owners of closely-held businesses, including family-owned companies, often agree to restrict the owners’ ability to later transfer their ownership interests to third parties. Such restrictions prevent one owner from selling...more

Should a Family Business Owner Make a Charitable Gift of Her S Corporation Stock?

Owners of family businesses are often looking to support charitable causes, while also seeking to obtain the most tax efficient outcome from such donations. Generally, a charitable contribution of appreciated property allows...more

An Oppression How-To: Revoke Employment, Profit Sharing and Control

An earlier post on this blog, examining a post-trial decision in Matter of Digeser v Flach, 2015 NY Slip Op 51609(U) [Sup Ct Albany County Nov. 5, 2015], described the minority shareholder’s dissolution claim under Section...more

Lessons Learned in Selling the Family Business

We have represented hundreds of family businesses (as well as other privately-held businesses) in negotiating and completing successful mergers and acquisitions. We have seen important lessons learned by families selling...more

Success Requires Buy-In From The Incumbent Generation

Last week, we were honored to have Greg Waggoner and Joanna Morrill of Leupold & Stevens, Inc. present to the Family Business Legacy Group. Greg is a representative of the 4th generation and serves on the company’s board of...more

KNOWN UNKNOWNS about Federal Tax Laws and Regulations

The new administration in Washington, supported by Republican majorities in Congress, has pledged substantial changes to federal tax laws and regulations. One change may - or may not - be the complete elimination of federal...more

Watch out for Fraud in Family-Business Purchase Agreements

In business purchase agreements, including agreements between family members, the seller often retains pre-sale liabilities, such as tax liabilities, while the buyer assumes post-closing liabilities related to the business’...more

The Different Roles of Shareholders, Directors and Officers in Family-Owned Businesses

Many family-owned businesses are organized as corporations to protect the owners from personal liability for business obligations. One consequence of organizing as a corporation is the legal separation of ownership and...more

Innovation in Family Business?

The latest from the Harvard Business Review’s ongoing inquiry into family businesses has yielded a surprising result. Research recently published in the Academy of Management Journal indicates that family businesses actually...more

Personal Liability of Executors for Tax Liabilities of the Estate Under the Federal Priority Statute, 31 U.S.C. 3713

This is an appeal of summary judgment by the personal representative (the “PR”) of an estate. The lower court found the PR to be personally liable under the federal priority statute, Section 3713, for tax liabilities due from...more

Who is authorized to bind your family business to contracts?

A family business’ significant commercial relationships are usually reflected in written agreements. But who is authorized to sign those agreements and to bind the company to the terms? Typically, a company’s management will...more

Bankruptcy Court Sends Not-So-Gentle Reminder About Observing Corporate Formalities

In a recent decision, the United States Bankruptcy Court for the Eastern District of Massachusetts sent a reminder to practitioners and family business owners that it is critical to maintain corporate formalities in order to...more

Community banks trade group asks Trump Administration to curb fair lending enforcement

The Independent Community Bankers of America issued a statement calling on the Trump administration “to rein in the overzealous application of fair lending laws.” ICBA stated that community banks are threatened by a recent...more

Leadership Transition in Prominent Seattle Family Business

Founded in 1928, Seattle-based Uwajimaya is transitioning to its third generation of leadership for the family-owned retail chain. Denise Moriguchi will take over as CEO next month, and has big plans for the company. As...more

Admission of Fraudulent Intent Is Not Conclusive Evidence of Fraudulent Intent (Sometimes)

In a previous blog post, we discussed a situation in which actual fraud could be found where the transferor had the noblest of intentions and had demonstrated no intent to defraud creditors. This week, we address a situation...more

What corporate records do family businesses need to provide to their shareholders?

In family businesses, disputes may arise concerning access to company information. Owners who work day-to-day in the business typically have unfettered access to this information, while passive shareholders may feel they are...more

2017 California Estate and Tax Planning Newsletter

Blank Rome’s annual estate and tax planning newsletter addresses estate planning concepts and techniques that should be considered in 2017 by our clients and friends. Transfer Taxes. The major changes made in 2010 in the...more

Family Business Report Highlights Successful Northwest Family Businesses

You may have thought the big story for Friday, January 20, 2017 was the inauguration of our forty-fifth president. But for those of us in the family business community in the Pacific Northwest, the Puget Sound Business...more

Should You Arbitrate Your Family Business Disputes?

When family business disputes erupt, the parties often end up in court, where a judge or a jury will decide their fates. Litigation of these cases often takes years. In Massachusetts Superior Court, for example, the rules...more

A Reprieve from Proposed Regulations Related to Valuation of Family Businesses?

In December, we posted a blog discussing a much anticipated hearing held on the Treasury Department’s issuance of proposed regulations under Section 2704 of the Internal Revenue Code (sometimes referred to as the 2704...more

Family Businesses Should Carefully Consider Indemnification and Advancement Obligations Included In Limited Liability Company...

When a family business operated as a limited liability company brings on professional management, the parties typically focus on items in the operating agreement such as capital contributions, allocations and distributions,...more

Beware of Conflicting Interest Transactions in Family Business Management

Directors of all corporations – including family owned businesses – owe a fiduciary duty of loyalty to the company. This duty requires a director to put the interests of the company ahead of his or her personal interest and...more

Treasury Department Unofficial Statements on Proposed Section 2704 Regulations

There is a lot of uncertainty whether the Section 2704 proposed regulations will ever be finalized, either due to policy to be set by President-elect Trump, and/or Congressional efforts to block those regulations....more

Rollover Equity in the Sale of a Family-Owned Business

If you sell your family-owned business to a private equity buyer, the buyer will most likely pay a portion of the purchase price with equity in the buyer’s new company, rather than with cash. The equity that you receive in...more

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