A Guide to Family Business Risks and How to Manage Them

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Every family-owned and run business should have legal representation. That way, the family members who are involved in the business can concentrate on making money and keeping the business solvent. A trusted lawyer can take care of legal problems that come up. That is what family business lawyers do: they solve legal problems and help the family business keep more of their hard-earned money.

Does the Business Have the Right Lawyer?

It is possible that a family business might need a new lawyer who specializes in family business law. This lawyer will be trained in business law and keeping more money for the family running the business. A lawyer knows all the ins and outs of family business law. Because of this training, the lawyer can help the family stay within the legal boundaries of running a business. When trouble comes, that same lawyer has the knowledge and experience to solve the problem.

A family business lawyer can help a family set up a business at the start or improve how an existing business is run so the family can create business rules and boundaries and honor and maintain those important boundaries. This can save the family money on lawsuits and fines. The lawyer will be available to call and ask for advice on different aspects of doing business and can save the family from making expensive mistakes.

The question to ask is if the family business has a lawyer or if an existing lawyer has the training to be effective. Make sure the lawyer being considered has the proper training and experience to do the job. Can the lawyer provide standard documents and help fill them out? Most lawyers are willing to work within a family business’s budget and provide only the needed services. A lawyer is not a wasted expense when owners considered the money the attorney can save the company with their knowledge.

A family business lawyer often works on a flat fee per month or as agreed to. It is important to have all fees and charges agreed to in advance so there are no nasty surprises.

When Family Lawyers Are Needed

Everyone thinks everything will go on forever as it is, and everyone will be useful, honest, and happy in their jobs. But, what if one family member wants out of the business? What if one person is not pulling their weight or is not acting in an honorable way? What if children decide they want to go their own way and not inherit the business? What if one or more marriages of family members break up? Divorce can sink companies if there is not a qualified family business lawyer to keep things under control.

Custody disputes can get ugly, and the right lawyer can keep things on track. Family complications within the business can make it more difficult to write estate plans, wills, or partnership agreements. All of these problems must fall within legal boundaries to be effective. Protecting business assets and making sure they go to the right people requires legal help and advice.

Filing of Important Documents.

A family business lawyer will help the company file all the legal papers required to run a business and file them on time.

It is also important to keep legal issues of a personal nature separate from business issues. When personal conflicts between family members spill over into the business, a lawyer can sort them out. They can draft a dispute resolution process before there is a need for one so it is there if problems happen.

Interesting Related Article: “How To Handle Disputes In A Family Business