Family Owned Businesses
Family Owned Businesses—the backbone of our economy—face nearly all of the challenges of non-family owned businesses, but additionally face a series of issues unique to Family Owned Businesses. MacDonald Illig’s Family Owned Business practice group understands the issues facing family businesses, and has the legal expertise and practical experience to guide Family Owned Businesses through all of the issues facing them. We have assembled a team across practice areas to be in the best position to counsel such businesses. Our interdisciplinary approach to counseling Family Owned Businesses provides efficient solutions to the complex problems Family Owned Businesses face.Related Services
Regardless of the formal business structure, Family Owned Businesses often face governance issues that other businesses do not. Generally, the governance issues arise, in part, due to the fact that ownership and the day-to-day operational control of a Family Owned Business is concentrated in a few people. These issues tend to grow when multiple generations are involved, and there are transitions in day-to-day control of operations in addition to the controlling ownership of a business.
Both planning to avoid, and resolving, Family Owned Business governance issues can be complex. Determining who makes decisions, how they make decisions, planning to avoid conflict in decision making, and resolving disputes regarding decisions, all come to the forefront in a Family Owned Business. MacDonald Illig attorneys have the legal expertise to deal with the planning issues surrounding the intersection of complex business decisions and family relationships, as well as the experience to resolve disputes with a practical, pragmatic approach when they arise.
General Business Counseling
Family Owned Businesses, while facing unique issues arising from being family owned, also face the same day-to-day legal issues in their operations that other businesses do. MacDonald Illig attorneys have the knowledge and experience to assist Family Owned Businesses in the day-to-day legal issues they face, regardless of whether the issues deal with drafting or negotiating contracts; developing forms, policies, or handbooks; addressing labor and employment concerns; or resolving disputes with suppliers or customers.
Planning for the succession of the business from one generation of family members to the next is of critical importance to both the future of the next generation and legacy of the current generation. Regardless of whether the succession from one generation to the next is achieved by sale, gift, some combination of the two, or a more creative arrangement, MacDonald Illig attorneys have the experience to guide a Family Owned Business through the legal, non-legal, and tax consequences of family succession in a business.
MacDonald Illig attorneys have experience and expertise in designing a succession plan to achieve a family’s goals while minimizing tax consequences, including:
- Taking a “big picture” approach to best serve the client’s interests in passing on a business to the next generation;
- Developing appropriate documentation to achieve the unique objectives of each client, whether the transfer is by sale, a seller-financed transaction, or involving gifting from one family member to another;
- Implementing a strategy to minimize the income, gift, estate, and transfer tax consequences to our clients; and
- Assisting with the training of the next generation to ease the impact of a transition on the business
Succession Planning Without a Natural Successor
Most business owners would like to see their business thrive after they retire, continuing to provide good jobs for their employees and anchoring the community for years to come. However, sometimes the owner of a Family Owned Business reaches an impasse: the generation that has built and cultivated the business would like to retire, but they do not have children interested in the business or another natural successor.
Leaning on decades of experience, MacDonald Illig can assist such owners in succession planning. No matter whether the right path is developing an Employee Stock Ownership Plan (“ESOP”), taking advantage of flexibilities in the tax code to develop a charitable foundation to own and operate the business, selling the business to an unrelated third party, or by cultivating a buyer from within the company management in lieu of a child as a natural successor, our attorneys will develop the right plan to achieve your long-term practical, tax, and charitable objectives.
For the owner of a Family Owned Business, succession planning and estate planning must be considered in a single, unified manner. Providing for the next generation and preserving the Family Owned Business go hand in hand. MacDonald Illig attorneys are prepared to assist you plan for a transition to a comfortable retirement, while providing for future generations and assuring that the business you worked so hard to grow will continue to grow and to serve its customers and its community.
Business owners do not always agree regarding the operations of the business, leading to a dispute. The intensity and implications of such a dispute can be magnified exponentially when the owners, officers, and employees of the business are a group of family members. Keeping in mind that the business participants in such a dispute remain family outside of the business, MacDonald Illig attorneys are prepared to call on their years of experience working through business issues amongst family members to find a practical, amicable solution to a Family Owned Business’ internal disputes.