Services for Family-Owned Business and Their Owners

Family businesses face the same hurdles as other businesses. Business families, however, must also confront the minefields of shared histories and complex relationships.

We help business families address the often emotionally-charged issues that shape the business succession plan, such as how (sale or gift) ownership will be transferred, who the transferees will be, what each transferee will receive, and the roles in the company members of the successor generation will have. Then, we develop strategies for transferring ownership to the next generation, such as lifetime gifting programs, corporate recapitalizations, lifetime and testamentary transfers, sales of ownership interests and buy-sell agreements.

Longevity and growth pose special challenges for family businesses. Typically, first generation ownership and management vest in one or a very few people. In the second and succeeding generations, however, the ownership group expands and the roles of owners and managers diverge. As this occurs, conflict regarding compensation and the degree to which profits will be reinvested in the business can develop between owners who are active in the business and those whose want to maximize distributions. At this stage, it may be appropriate to create classes of ownership with different voting, distribution or other rights.

Key non-family employees can become more important to the company as growth and factors such as technology and the global economy demand increased and specialized management capabilities. At the same time, more family members may seek employment in the company, particularly in a down economy. We help develop strategies for attracting and retaining key non-family employees, establishing criteria for family members to enter or be promoted within the business, and creating governance structures such as boards of directors or a board of advisors.

We understand that very often family businesses and business families are served best when professional advisors collaborate. Our attorneys have teamed with family business consultants, business consultants, certified public accountants, financial planners and others to help family businesses with the challenges they face.

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Andy Karlen, working with our other professional advisors, structured the transfer of our electrical contracting company to me from my father, the founder and truly a self-made man. We were immediately at ease with Andy because he listened without attempting to showcase his expertise. He understood that the business succession and estate plans my parents would ultimately embrace would have to be fair to my three sisters in addition to transferring the business to me. At one of our meetings, my father told Andy about his life, how he started and built the business and the values upon which my mother and he raised my sisters and me. I can’t say whether my father or Andy enjoyed that conversation more. I can say, however, that the wise decisions my parents made were facilitated by Andy’s counsel, particularly at the critical moments when legal, estate and gift tax strategies and their comfort levels appeared out of synch. I would highly recommend him to anyone in need of corporate legal counsel, especially that in the area of estate and succession planning.   

Richard Sajiun, President
Saijiun Electric Inc.