Archives: Ownership & Leadership Transition

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Success Requires Buy-In From The Incumbent Generation

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Last week, we were honored to have Greg Waggoner and Joanna Morrill of Leupold & Stevens, Inc. present to the Family Business Legacy Group.   Greg is a representative of the 4th generation and serves on the company’s board of directors after working in the business for 22 years.  Joanna is the manager of the newly formed family office.  The Leupol… Continue Reading

Leadership Transition in Prominent Seattle Family Business

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Founded in 1928, Seattle-based Uwajimaya is transitioning to its third generation of leadership for the family-owned retail chain. Denise Moriguchi will take over as CEO next month, and has big plans for the company. As detailed by a recent Seattle Times article, Denise has long-lasting memories relating to decades of working at Uwajimaya with her famil… Continue Reading

How Do You Run Your Family Business?: Choosing the Right Model of Ownership and Control

Building business. Concept image of developing growth strategy.

As a family business changes and develops, the way that decisions are made may need to change along with it. Choosing a control model simply because it’s the way that things have always been done may not be enough to assure the success and longevity of a family business – especially as the number of owners grows. This is the reality faced by many family busin… Continue Reading

Family Business Succession Planning: Learning from the New York Times

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On October 19, 2016, Arthur Gregg Sulzberger was named deputy publisher of the New York Times, paving the way for the fifth generation of the Ochs-Sulzberger family to lead the family enterprise. He was one of three cousins vying for the position and his appointment concluded a long and careful process designed to ensure a smooth succession from the fourth t… Continue Reading

Washington’s New Trustee Delegation Law: Allowing Fiduciaries to More Easily Keep Businesses in the Family

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If you are a family business owner in Washington who wants to place control of your business in the hands of a trustee until your beneficiaries are ready to assume control, or for other reasons, a recent change in Washington law may make this alternative more accessible.

Until recently, trustees had little flexibility in managing an operating business, and … Continue Reading

The Non-family CEO in the Family Business

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In June of this year, Davis Wright Tremaine LLP hosted its fourth annual Farm to Label summit in Portland, Oregon.  One of the programs of the day was a panel mediated by DWT’s Drew Steen on the role of a non-family member executive in a family enterprise.

Appointing a non-family member executive can be the step that takes a family business to the next level,

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Who Owns the Family Name?


For good reasons family businesses often use a family name in their business names. The use of a family name has a number of benefits, from quickly identifying the familial association with the business to honoring the legacy of the family.

While a family name may serve to differentiate the family business from other businesses in a similar field, the law doe… Continue Reading

Passing on the Business to the Next Generation: Not for Everyone


A recent article in The Economist (“The Reluctant Heir”) addressed the challenges in getting the next generation ready to take over the family business. These challenges are nothing new in the family business community. In fact, the Pacific Family Business Institute’s most recent survey of Northwest family-owned businesses cites this particul… Continue Reading

Parent, Child and Participation vs. Ownership: A Family Business Dilemma


Here’s a common scenario: Parents successfully develop a business. Then their children get involved in the business – but maybe not all of the children. Then comes the challenge: One of the offspring works at the business and is directly involved in delivering the results of the business. Other offspring either are not involved in the business or don… Continue Reading

Keeping the “Family” in Family Business: Succession of Ownership Does Not Always Mean Succession of Control and Income


As family business owners often are advised, business succession planning should include some form of estate planning. This advice is especially true when an owner wishes to transfer a business to future generations by gift or inheritance, instead of planning for a sale of the business to an unrelated third party. An owner wishing to make a donative transf… Continue Reading

The Family Buyout: Tips for Success


In the life cycle of a family business, one common event is the purchase by one or several family members of the interests in the business held by other family members.  Because of the family relationships inherent in such transactions, it’s easy for something to go wrong and either delay the transaction or even squelch it entirely.  Families who have be… Continue Reading

Value of Independent Directors for the Family Corporation


In the wake of the financial scandals of the early 2000s, a push was made to increase the number of independent directors on public company boards.  Most public companies are required to have a majority of independent directors on their boards to be listed on the NYSE or NASDAQ.  Even public companies controlled by a majority shareholder are required to ha… Continue Reading

New Tax Rules for Tangible Property


Progress always requires change, and progress in the way we tax tangible property is no exception. The tangible property rules have long been one of the murkier areas of the federal tax code. But new regulations — the last piece of which was issued in September — clarified the rules for acquiring, improving, maintaining and disposing of tangible proper… Continue Reading

Keeping Ownership in the Family: Part III, The “Drag Along” Provision

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Part III of this three-part Keeping Ownership in the Family series will discuss at a high level the use of what is commonly referred to as a “drag along” provision – a very common provision found in buy/sell or stockholders agreements for closely held and family-owned companies. Part I of this series discussed rights of first refusal. Part II discusse… Continue Reading

Keeping Ownership in the Family: Part II, Co-Sale Rights


Part I of this series gave a brief overview about the right of first refusal, one of the more common tools used by closely held companies to ensure that ownership stays within the existing group.  This Part II will discuss another tool – the co-sale right.   On first blush, a co-sale right is a mechanism to assist equity holders to sell, rather than restri… Continue Reading

Keeping Ownership in the Family: Part I, Rights of First Refusal


Many closely-held businesses have adopted agreements among their equity owners that restrict the owners in what they can do to sell or transfer their equity.  In corporations, such agreements are frequently referred to as shareholders’ agreements.  In limited liability companies, the key terms of such agreements are included in LLC operating agr… Continue Reading

Buy-Sell Agreements Between Family Members May Create Unintended Transfer Tax Liability for the Seller


There are many advantages to buy-sell agreements.  These agreements can be used to restrict the transfer of a business to outside parties, protect “S” corporation status by preventing transfers to disqualifying shareholders, or ensure the liquidation of the business interest on the death of an owner.  However, if the buy-sell agreement is betwe… Continue Reading

Proud to be a Family Business

Richard Edelman is proud to be the CEO of a family business. 

A few weeks ago, the Harvard Business School Working Knowledge (HBSWK) published an article that summarized some research on family business CEOs.  Among other conclusions, the research indicated that family business CEOs do not appear to be motivated by maximizing profits or their own compe… Continue Reading