FAMILY BUSINESS STRUCTURE
Family Business Structuring & Governance Protect What You’ve Built For the People Who Come After You | SRC
Most family businesses are started with very little formal structure. In the early years, that’s fine everyone knows their role, decisions get made around the dinner table, and trust holds things together. But as the business grows, as the next generation gets involved, as profits get larger and stakes get higher, that informality starts to create problems.
We’ve seen it play out many times. Two brothers who built something great together start disagreeing about the direction of the business. A founder who never documented how the business should be run passes away, leaving the family to figure it out under pressure. A son joins the business but nobody is quite sure what his role is or what he’s being paid for. These situations aren’t unusual they’re almost inevitable when structure hasn’t kept pace with growth.
At SRC, we work with family businesses to put the right frameworks in place before these problems surface. And where conflict has already started, we help families find a structure that everyone can work within.
Bringing Clarity and Structure to Family Businesses
Most family business conflicts aren’t really about money or succession they’re about unclear expectations. Who makes which decisions? How are profits divided? What happens when a family member isn’t performing? What does the business look like when the founder steps back?
When nobody has answered these questions formally, everyone answers them informally and differently. That’s where disputes come from.
Our work starts with understanding the family and the business how ownership is currently held, who is involved in running things, what the relationships look like, and where the pressure points are. From there, we help design a structure that separates ownership from management, defines roles clearly, and gives the business a governance framework that works independently of any one person.
What a Well-Structured Family Business Looks Like
Ownership needs to be clearly documented. Who owns what, how decisions are made at the ownership level, and what happens if someone wants to exit these things need to be written down in a way that holds up legally and that every family member understands and accepts. Sometimes this means reorganizing how shares or partnership interests are held, setting up a holding structure, or converting the business into a more appropriate legal entity.
Management needs to be separated from ownership where possible. Family members in the business should have defined roles, clear responsibilities, and compensation that reflects what they actually do not what they inherit. This is one of the most sensitive conversations we have with families, but it’s also one of the most important. A business where family members are paid based on relationship rather than contribution doesn’t stay healthy for long.
Governance needs to be formalized. That doesn’t mean turning a family business into a corporate bureaucracy. It means having a clear process for how major decisions get made, who has authority over what, and how disputes get resolved without the whole family falling out. A well-drafted family constitution or shareholders’ agreement does exactly this it gives everyone a framework to work within that exists outside of any single relationship.
Succession needs to be planned while there’s still time to do it properly. We’ve worked with families who started succession planning too late, and the transition was painful and disruptive as a result. The earlier a founder starts thinking about who takes over, how the transition happens, and how to prepare the next generation, the smoother it goes.
Family Business Ownership, Governance & Succession Support
We advise on ownership restructuring and holding company formation, draft shareholder and partner agreements, help develop family constitutions, design governance frameworks, plan succession and leadership transitions, and structure profit distribution in a way that’s tax-efficient and fair. For families who want ongoing support, we also work as virtual CFO providing continuous financial oversight and advisory as the business evolves.
Who Typically Approach Us?
First-generation entrepreneurs who are starting to think about what the business looks like without them at the centre. Multi-generational families where the original structure no longer fits how the business operates. Siblings or cousins running a business together who need clearer boundaries. Families who are planning to bring in external funding or expand, and know that investors will expect proper governance. And sometimes families who are already in conflict and need a neutral, professional hand to help them find a workable structure.
What Changes When a Family Business Is Properly Structured?
When a family business is properly structured, the day-to-day feels different. Decisions get made more cleanly. Disagreements stay in the boardroom rather than the living room. The business becomes easier to manage, easier to finance, and easier to hand over when the time comes. And the family relationships which are ultimately what matter most are protected rather than strained by the business.
Ready to Talk About Your Family Business?
If your family business has grown to a point where the informal arrangements no longer feel adequate or if you can see tensions building that better structure could prevent we’re happy to have a candid conversation about where things stand.
Reach out to our team at SRC. We’ve had this conversation with many families, and we know how to approach it carefully and practically.
