Family-held and run businesses are the oldest and most prevalent form of business not only in India but also around the world. In India, keeping the business within the family is an age-old practice. Some of the major families run businesses in India are The Tata Group, The Aditya Birla Group, Godrej Group, Shapoorji Pallonji Group, The Reliance Group, etc. On one hand we see the thriving and developing businesses which are run by a family, on the other hand we also have heard of some feuds between families which resulted in the partition of their businesses.
Two German brothers, Adolf and Rudolf Dassler founded a shoe company in the 1920s. Tensions started arising as their business started developing. As a result, the conflict between the two brothers divided not only the company but also the town where they lived. The people of Herzogenaurach had to decide to join either one brother or his shoe company- Adidas or Puma. This is a mere example as to what extent the problems in a family business could impact the business as well the people related to it.
Family business disputes could arise from various reasons, it could be due to sibling rivalry or generational gap between the owners and their children, or a dispute could be between members who are active in the business and those who are passive in the working of the business.
With every business partnership, the most important question which arises after such a conflict is what would be the future of such a family business. In such situations, one should seek proper guidance from a Property Lawyers In Delhi who could provide proper advice so that the assets of the business are not affected due to the conflict in the family... During these situations, the parties to the dispute should ask the following questions-
Does the family wish to continue the business or one or more members wish to leave the business
If the parties wish to divide business as two separate businesses or divide the assets in any way
If the issue is severe do they wish to appoint a third party
Do they wish to sell the business
If any party need to commence the court proceedings
If they wish to appoint a mediator to resolve their dispute
If they wish to resolve their dispute and continue their business
If a situation comes to a deadlock, and is affecting the business, it may become necessary to move the court.
Challenges for family-owned business-
Family-businesses have their own challenges; some of them are as follows:
Though family businesses thrive on emotions such as trust, love, and affection, emotions such as hatred, jealousy or rivalry could also affect the business negatively. Thus, while making decisions these issues should also be taken into account.
If the business is passed by inheritance, conflicts could arise between heirs who are actively involved in the business and those who are in passive positions.
There is no structured form of governance in many small family-run businesses as there is familial trust and respect involved.
Some family businesses don’t let outsiders join in the management teams. this in long term affects the company.
If the succession is not pre-planned, it may result in a family dispute which sometimes leads to the collapse of the entire business.
These were some issues and reasons for the disputes in the family-owned businesses. The need of the hour is to appoint a Corporate Lawyer in Delhi who can guide you through various issues which are bothering the business at present or are going to be a big crisis for the business.
Businesses are inseparable from family; similarly, they are inseparable from family issues and would impact the business at some point. Thus, it's very important to curb these family issues at home only. One could seek a good Family Lawyer in Delhi who could provide advice as to how one could separate the business being affected by family issues such as divorce or partition, etc.
Lead India provides a wide pool of experienced lawyers who could advise you with issues related to family laws, property laws, etc. Assistance is also provided with legal procedures, etc...
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