When Family Shareholders Want Out

Too Many Aunts, Uncles, and In-Laws Who Own Stock and Have Clashing Interests and Personalities can Bring a Company to its Knees.
Here’s how to Buy Out Some of Your Family Shareholders to Preserve the Peace.

by Harvey D. Shapiro

Death, it sometimes seems, may be the easiest way out of a family business. With proper attention to insurance, succession, and estate planning, those who leave this veil of tears can also depart from their family firm with limited impact on the business. Other exits are often decidedly more traumatic for the businesses and the individuals involved.

Nonetheless, many family business owners have to realize there inevitably will come a time when some shareholders decide they want to do something else with their time and money. They may want to convert their investment into assets that are more liquid in order to meet other personal or business needs; they may want to diversify their assets to avoid relying too heavily on the company; or, they may find themselves tired of the business–or (perish the thought) their relatives. More…

Plan Now for the “Cousin Generation”

UMassby John Ward

For a year, speakers have come to the Family Business Center to say, in one way or another, that a family business thrives when family business members put business concerns ahead of family issues.

But John Ward has other ideas. In order for a business to thrive, he believes, it must incorporate the values and operating structure of the family. “The real issues are family-based issues more than business-based issues. The family is the most important place to focus our attention.”

As an example, Ward, author of Keeping the Family Business Healthy and other books, family business columnist for Nation’s Business, and Professor of Private Enterprise at Loyola University in Chicago described a scenario of a business that has several expansion choices. It could add new product lines within its current geographic territory, buy out a competitor in a foreign country, or develop new market penetration by opening up locations on its own in different parts of the country. More…