When I was searching for judicial opinions to include in my casebook, I was shocked to see how many cases involved family businesses. Children versus parents, brothers versus sisters, cousins, cousins, cousins. When conflicts erupt in a family business, the issues of a lifetime often are laid on the table. And the focus of these disputes is always the same: control. In many instances, this is the genesis of the problem:
The most significant problem which will prevent family businesses from successful transition into the next generation is not estate taxes, not competition from the Wal-Marts of the world, not the lack of reasonably sound financial planning, and not the lack of industriousness or work ethic of successor generations. It’s the epidemic behavior exhibited by senior generation or founding generation business family members who refuse to let go of their companies!
When students approach with concerns about working in a family business, I advise them to be extremely cautious. Being a cohesive family can be tough enough without adding the stress of a business. And do you really want to be under your parents' thumbs until they die?
Hat tip to Law & Entrepreneurship News.
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