What is a family business agreement?
A family business agreement (FBA), sometimes known as a family constitution or a family charter, is a non-legally binding document that provides a clear framework for how your family directs matters when it comes to the family business and family wealth.
It is a bespoke document that caters to the needs, beliefs and characteristics of your business and family and can be thought of as a preventative form of mediation.
An FBA is not a rule book. It is an agreement between family members which needs to be reviewed on a regular basis to ensure it meets your needs as they evolve. Nor is it a solution for existing problems and we suggest that any discrepancies are resolved before you begin the process of creating an FBA.
Why introduce a family business agreement?
When it comes to family business and family wealth, personal and professional dynamics may become imbalanced.
Taking the time to agree and document your family business’ goals, roles, structure, policies and protocols in an FBA can be invaluable as it is a step towards protecting both your business and wealth for generations to come. It can also provide clarity and improve communication by allowing your family to talk openly and honestly about their hopes, expectations, goals and concerns.
What can be included in a family business agreement?
Every FBA will be different and our advisors will help you to identify what is important for your family. Some things that you may find beneficial to include are:
- Your family mission or ethos. What is your vision for the future and how will you get there?
- A definition of individual roles, relationships and structure within the family. Who has authority, and who is responsible for what?
- Policies about remuneration, communication, leadership, ownership, transfer of wealth, employment and changes in the family, such as marriage or divorce
- What is the procedure for making a decision? How will you resolve disputes? What is the process for a family member joining or leaving the business?
- Family business succession planning
- In addition to the above, our private client lawyers are able to prepare wills and/or trusts for all family members involved in the family agreement to minimise the dispersal of your family wealth.
How we can support your family owned business
We have worked with small and medium sized family businesses with high growth, especially those that are going through significant changes, for a number of years.
We understand that every business has different requirements. As a full service law firm, we can work with you to find the right mix of legal expertise for you. The areas of law most common to family businesses are:
- Corporate transactions
- Commercial contracts and agreements
- Intellectual property
- Employment and HR
- Divorce and family law, including pre and post nuptial agreements
- Business succession planning
- Wills, trusts, probate and estates, including lasting powers of attorney
What our clients say about us
“Clients appreciate Rayner Grice‘s ‘depth of experience in matrimonial disputes, her compassion and her support throughout’.” Chambers UK 2017
John Irving “provides prompt and useful advice” Legal 500 2016
“Whatever we do next can I ask for Helen Tse as my “wingman” she seems to be very commercial and logical.” Client
“Very good and efficient service and advice” Client of Carol Cummins
Free initial family business agreement consultation
Clarke Willmott’s team of family business lawyers can guide you through the process of creating an FBA that is right for your family. As a first step, we offer a free initial telephone consultation so we can answer any questions you may have and identify the specific needs and requirements of your business.
This can be followed by a meeting with the key family members to discuss:
- The requirements of the agreement
- Timescale and ongoing contact
- Clarke Willmott specialisms required
A cost estimate will then be provided for the preparation and finalisation of the agreement.
Contact a family business lawyer
|If you would like to find out more about how we can support your family business, please contact one of our lawyers directly using the details given on their profile page or by calling 0345 209 1382 / 0345 209 1299.
For more information, please download our family business agreement brochure.