Common Causes of Family Business Conflict & What to Do About Them.
Family Business Mediation Video No 40. Buying & Selling Interests In The Business.
By Jon Kenfield. Solutionist.
• Conflict occurs when family members feel locked into holding ownership in a family business against their wishes – they would prefer to sell / exit – and there’s no agreed mechanism for doing so.
• Conflicts also occur when family members can’t stitch up acceptable deals for trading their respective interests in the business.
• Conflict arises when some family members regard themselves as owners, and want to act as such, while others see themselves as stewards, and want to act as such.
Solution
• Does the family have a mechanism for buying and selling interests in the family business? Possible? Partly possible? Totally acceptable?
• If not, and it could happen, develop a formula and process when things are calm. Put it into a shareholder agreement / family constitution etc.
• Is it workable at this point in time (eg: money available, value and valuation formulas etc).
• Hold a Family meeting to discuss individual needs and wishes re ownership of the business.
• Negotiate / develop an acceptable basis for a deal (use a mediator if necessary).
• Do the deal, or agree to do it at a pre-determined time in the future.
