Private Companies: The Next Generation

Transferring a family business to the next generation is often more complex than owners expect. Family dynamics, such as your children's interest in the business, as well as their qualifications and capabilities, play a role. So does their capital preparedness. At the same time, you need to consider the legal structure that will support a successful transition.

Some of the questions you need to answer include:

• What will happen if one child wants to take over the business and another doesn't?
• Will you make provisions to buy back a child's shares if they aren't the right leadership fit?
• How will you compensate any children brought into the business? Will they receive a salary or dividends (or both)?