As we all look back fondly on the Family Day we just celebrated, or perhaps with a “see ya later suckers” attitude, it seemed like the right day to Blog about family businesses.
The mere mention of Family Business sets off the gentle ding ding of alarm bells in most Business Lawyers’ heads and often, not surprisingly combined with the “ding ding ding” sounds of a jackpot win. Why is that? Well, unfortunately, most Family Businesses have more problems than most, particularly in employment areas as well as succession planning.
Over 27 years of advising clients on Family Business matters I have the following pieces of advice to share:
- Do not force your adult children to work in the Family Business.
- Adult children, do not work in the Family Business out of guilt.
- If you employ your adult children, pay them an appropriate wage.
- If you employ your adult children, use an employment agreement, just like you would with a non-family employee.
- Do not micro manage your adult children employee.
- Have a proper succession plan for passing the Family Business to your adult children.
Failure to follow the above will likely lead to big legal bills, hashing out problems with the adult children and the other employees in the workplace who will mimic the discord in the relationship at the top.
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Inga B. Andriessen, JD