Family-owned businesses are on the rise. According to the United States Bureau of Census, 90 percent of companies are part of this category. But with this setup comes the greater risk for disputes and disagreements, especially when it comes to succession planning.
The thing about family-owned businesses is that there’s always the issue of who gets what. In a study by Wilmington Trust, 78 percent of small businesses don’t have succession plans. So when the time comes for the patriarch or matriarch to step down, things can quickly get heated.
If you get caught in the middle of a business succession dispute, here are some tips on how you can resolve it:
Understand the situation.
The first step is to understand what’s going on. What are the issues? Who are the parties involved? Once you have a clear picture of the situation, it’ll be easier for you to find a resolution. Many business disputes happen because of a misunderstanding. So it would be best to get all the facts before making your move.
Suppose someone is left out of the business. In that case, find out why. Is it because this person doesn’t have the skills or experience? Or is it because of a personal grudge? After knowing the reasons, it’ll be easier to find a way to address the problem.
Most of the time, there’s a reason for appointing the heir apparent. It could be because this person is more qualified or has been with the company for longer. In other cases, the chosen heir is a son or daughter. If you can find out the reasons behind the decision, it’ll be easier to accept the situation at hand.
Talk to the parties involved.
Unless there’s a physical altercation, it would be best to talk to the parties involved. This way, you can get their side of the story and find out what they want.
Business succession disputes often happen because one party wants to defend its right. So it’s essential to talk to them and find out their grievances. It’s a professional way to handle and help prevent the problem from escalating. As much as possible, avoid taking sides. Your goal is to find a resolution that would be acceptable to both parties.
A peaceful resolution is always the best way to go. But if talking doesn’t work, you can consider mediation or arbitration. These are alternatives to avoid court intervention, which can be costly and time-consuming.
Find a common ground.
If you can find common ground, resolving the dispute will be easier. For example, if two siblings are fighting over the business, try to find an agreement that would benefit both parties. Perhaps one can get the business, and the other can get a lump sum of cash.
It would be best to sit down with the parties involved and devise a list of possible resolutions. This way, you can narrow down your options and find the best solution for the problem. After all, the goal is to keep the family business running despite the disagreement.
Of course, it’s crucial to have a witness or third-party mediator during the discussion. This way, both parties can have peace of mind knowing that someone impartial is present. It’s a great way to prevent the situation from getting out of hand.
Get professional help.
If you didn’t seem to find a resolution, it would be best to get professional help. After all, you don’t want the situation to cause more damage to the family business. You can seek the support of a professional mediator or lawyer.
A mediator is a neutral third party that can help both parties come to an agreement. On the other hand, a lawyer can give you legal advice on what to do next. The best beneficiary representation lawyer will help you protect your interests and rights. In doing so, you can avoid making a decision that you might regret in the future.
Whichever you choose, make sure to pick someone that you can trust. After all, you’ll be sharing confidential information about the family business.
Business succession disputes are common among family-owned businesses. But with proper guidance, you can resolve them quickly. The key is to understand the situation and find a resolution that would be acceptable to both parties.
Sorting business inheritance disputes can be challenging, especially if you don’t know where to start. By following the tips above, you can hopefully make your way towards a resolution. And with that, you can keep the family business running smoothly.