If you have a family business, it may be useful to have a family constitution in place. These documents, also known as family charters or family protocols, provide a framework for engaging with family members involved in the business. They also take in related investment companies, the family office, and the trustees of family trusts.<\/p>\n
A family constitution is a written statement that records the family’s heritage, culture, hopes and aspirations for future success, and plans how to achieve that success. The document enables the smooth running of family affairs and interests by containing a number of provisions for different events.\u00a0<\/strong><\/p>\n To arrive at these provisions, a family will need to consider the following questions:<\/p>\n Though a family constitution is not binding, it helps to avoid potentially catastrophic fall-outs by anticipating what should happen should a major family event occur. Having such a document means the family is not forced to take decisions in the heat of the moment, perhaps in very difficult circumstances, but has actively planned for different eventualities.<\/p>\n When preparing this document, each family member has the opportunity to express their views on the questions above. Although not everyone may like the outcome of any particular decision, they will respect that they have been consulted, and have taken part in framing the constitution, and are less likely to protest if decisions are not in their favour.<\/p>\nWhat should be included?<\/h2>\n
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Planning ahead<\/h2>\n
Involve everyone<\/h2>\n