I'm involved with a fairly substantial business (banking and etc related) that was built from the ground up among a core group of partners, and then later acquired other small banks and banking related businesses that similarly involved tight knit families and community ties.
The presented a real problem, that the folks in charge addressed pretty quickly.
The problem was that everyone felt emotionally tied to these businesses that they had built up, their families and communities in many ways identified with them. Many of them operated in small or suburban sized communities so they weren't just some random business to the families involved.
But as it grew it was clear it wasn't "dad's bank" or such anymore as far as % of ownership went and so on. The individual "dads" or other owners made those deals and understood it, but the question was would their families understand and could that create conflict?
Obviously after acquisition / offering additional opportunities to buy stock (this was a privately held company) things changed and maybe not everyone was on the same page and they wanted to avoid any conflict if someone showed up thinking they were in charge who wasn't... but still had a big enough piece of the pie to cause more than a futile legal fight.
The solution was that the bank (actually the holding company that held the bank and other entities) would be employee owned (i'll not get into how that works just for the sake of brevity) and effectively the old guard would only be allowed to own X% of the shares. Any shares transferred to children had to meet certain criteria (only so much could be transferred) and events like inheritance often would require the shares to be sold back to the holding company at a given price (they had a system of internal and external evaluations to determine the pricing).
To date it has worked out pretty well. Perhaps the answer to some of these issues is to simply not to pass the business on whole hog, at least not in a manner where control is an issue.
The presented a real problem, that the folks in charge addressed pretty quickly.
The problem was that everyone felt emotionally tied to these businesses that they had built up, their families and communities in many ways identified with them. Many of them operated in small or suburban sized communities so they weren't just some random business to the families involved.
But as it grew it was clear it wasn't "dad's bank" or such anymore as far as % of ownership went and so on. The individual "dads" or other owners made those deals and understood it, but the question was would their families understand and could that create conflict?
Obviously after acquisition / offering additional opportunities to buy stock (this was a privately held company) things changed and maybe not everyone was on the same page and they wanted to avoid any conflict if someone showed up thinking they were in charge who wasn't... but still had a big enough piece of the pie to cause more than a futile legal fight.
The solution was that the bank (actually the holding company that held the bank and other entities) would be employee owned (i'll not get into how that works just for the sake of brevity) and effectively the old guard would only be allowed to own X% of the shares. Any shares transferred to children had to meet certain criteria (only so much could be transferred) and events like inheritance often would require the shares to be sold back to the holding company at a given price (they had a system of internal and external evaluations to determine the pricing).
To date it has worked out pretty well. Perhaps the answer to some of these issues is to simply not to pass the business on whole hog, at least not in a manner where control is an issue.