Most advisors recommend that a family business have and use a board of directors. In fact, the majority of closely-held corporations are formed with boards of directors, but those boards frequently consist of only a single individual. Moreover, there are very few actions that technically require board approval. So there is always a temptation in a cl… Continue Reading
If you are looking for a fresh perspective on family business matters, but not ready to be bound to follow the recommendations of outsiders, an advisory board may be the perfect vehicle. Unlike a fiduciary board of directors, members of an advisory board have no decision-making authority. Their role is to provide non-binding, strategic advice to the compa… Continue Reading
What is a Family Council and why would owners of a family business find the effort and time to form, organize and operate one worthwhile? To explain how the Family Council can operate and why it could be beneficial, this short article presents an example from a recent engagement with a client (identities changed to protect confidentiality).
First of all, a Fa… Continue Reading
More and more family owned businesses, from the largest to the smallest, are engaging in philanthropy. Many family businesses use philanthropy as a way to develop and commit to fundamental family values for current and future generations; publicly express the values of the family business, support the community, and benefit from the attendant reputati… Continue Reading
Due to the general success of the stock market in recent times, many people are currently carrying appreciated stock as part of their balance sheet. Individuals who are charitably inclined and looking to make donations to a tax-exempt organization should consider using this appreciated stock from their portfolios instead of cash, as the tax savings can b… Continue Reading
The governance system for a family-owned business provides the structure through which the objectives of the owners and the company are set and the means for monitoring performance against them is established. This system balances the interrelationships among the family, the owners of the company, the company’s board of directors, and its managemen… Continue Reading
This market offers family businesses a multitude of alternatives to selling your company.
You are a family business owner. You continue to see the stock market appreciate, and you read about M&A activity and valuations being at a cyclical high. You likely have a number of friends who have sold their business, and hear from them about the available finan… Continue Reading
In a brief piece for Strategy+Business titled “Business Leaders as Catalysts for Change,” Bob Woods recently interviewed George Oliver, a man with leadership experience as a senior executive at Johnson Controls, Tyco, and GE. Mr. Oliver talked generally about the changing role of the CEO in modern companies, but particularly highlighted the need f… Continue Reading
If your family business has or anticipates having more than one owner, you need a Buy‑Sell Agreement. A Buy-Sell Agreement governs the terms and conditions under which ownership interests in the enterprise may be transferred. It can take the form of a standalone Buy-Sell Agreement, a Shareholders’ Agreement, or detailed provisions within a limited … Continue Reading
One challenge for all employers – and in particular family-owned businesses with less than one-hundred employees – is making available affordable health care options. Association health plans aggregate the purchasing power of smaller employers to help create affordability. Association health plans also address competitiveness by providing b… Continue Reading
Talk about data compliance and privacy, or the lack thereof, has been in the headlines in major ways recently. Between companies testifying in front of legislators about their handling of consumer’s information, California passing a hasty online/offline privacy bill to stave off a ballot initiative, or the European Union implementing the most robus… Continue Reading
While many of us were preoccupied with the sweeping “Tax Cuts and Jobs Act” passed into law in December 2017, a less publicized change in tax law went into effect on January 1, 2018. For those family-owned business that operate as limited liability companies or partnerships, this is important news for you. The IRS is substantially changing the rules on a… Continue Reading
It is not uncommon these days to see family-owned businesses with two classes of stock. Typically, one class has both voting and economic rights; the other class has only economic rights. With this structure, a couple of things are possible. For one, this structure can facilitate a gradual transfer of the business to a new generation. The senior generation … Continue Reading
Seattle has passed an employee hours tax, commonly referred to as a “head tax,” which takes effect in 2019. Most are aware that the tax affects corporations, LLCs and LLPs with annual revenues in excess of $20 million “engaging in business activities” within Seattle. (Exempted from the ordinance are nonprofits and certain industries in which tax… Continue Reading
The trademark laws of the United States provide businesses with significant advantages in protecting their brands, even without perfecting those rights with the state or federal governments. This is because the United States trademark law confers trademark rights based on use in commerce, meaning in many situations unregistered rights can be used as e… Continue Reading
Family businesses are fraught with challenges, but those challenges need not overshadow the benefits of maintaining a strong and successful family business. According to the Wright sisters, owners of an event production, design, and management firm in Los Angeles, there are a few important tips to consider when starting a family business.
First and for… Continue Reading
Most family business owners might live their entire lives without running into securities law issues or problems. Many probably believe that there is an automatic exemption applicable to a family business from the registration and antifraud requirements under the federal and state securities laws, which are designed to protect investors.
Well, it’… Continue Reading
A thoughtful shareholders’ agreement can be one of the most valuable tools a family business has. It can serve several purposes. A few of the easy ones are:
Restrictions on Transfer. A shareholders’ agreement—or similar document—can place appropriate restrictions on transferring shares, particularly transfers outside of the family. It can d… Continue Reading
Ross Henry, a client advisor at Laird Norton Wealth Management, recently published an excellent article entitled “Succession Planning is a Process, Not a Project.”*
While noting how critical succession planning is to a family and its business, and how easy it is to put the process off, Ross identified the three main components of succession planning… Continue Reading
Congratulations to our client Joshua Green Corporation on being nominated for the 2017 Family Business Legacy Award by Seattle Business Magazine. Davis Wright has had the honor of representing the Joshua Green Corporation for over 25 years.
Joshua Green Corporation had its beginnings in Washington State in the 1890s. It was actively involved in the fo… Continue Reading
At this point, no one knows exactly how or when changes to federal income tax, gift tax and/or estate tax will occur. What we do know now is that what has been proposed so far is likely not going to be the final product. So, stay tuned, but do not stop or delay your succession planning efforts. Instead, focus on your long-term vision and build flexibility into your … Continue Reading
Running a family business can from time to time strain family relationships. This is especially true between siblings who may feel as if they are in constant competition to determine who is worthy enough to take over the family business. However, a sibling relationship does not have to be strained so long as siblings work together to foster a respectfu… Continue Reading
Michael Eisner, former CEO of Walt Disney, said it best that “management is not a science, it is an art.” But, not all art stands the test of time—and the composition of the board, and the way the directors manage a family owned business may very well determine whether that business even exists in the next 10 years.
The masterpiece that can be a family owne… Continue Reading
Business buyouts are red hot, and pricing is back up to where it was before the Great Recession, thanks to cheap financing and a stronger U.S. economy. The fact is that this market won’t last forever.
Feeling the pressure to exit? That’s understandable, especially if you’re presented with what looks like an incredible deal. But we suggest you t… Continue Reading