We are pleased to share with you a link to a recent article from the Puget Sound Business Journal featuring DWT partner Bill Weigand. At a recent Northwest Family Business Advisors meeting, Bill and fellow family business advisors Dan Gaffney (Moss Adams LLP), Christian Schiller (Cascadia Capital), Richard Simmonds (Pacific Family Business Institute)… Continue Reading
Hiring and employing family members is common in the realm of family businesses. An important thing to remember is that most family employees are treated in the same manner as any other employee for federal tax purposes, meaning that their compensation generally is subject to federal income tax withholding and FICA (i.e., social security and Medicare) an… Continue Reading
When Congress enacted tax reform in December 2017, federal gift and estate tax “basic exclusion amount” (often referred to as the “gift and estate tax exemption”) increased to $10 million per person (from $5 million), indexed for inflation ($11,180,000 in 2018 and $11,400,000 in 2019). Absent further legislation, this portion of tax reform sun… Continue Reading
The three-circle family business model was introduced in 1978 by Renato Tagiuri and John Davis at Harvard Business School. The model represents three categories of individuals within a family business and the seven interest groups that result from all the combinations of these three. The diagram is a visual aid for representing the family business, and o… Continue Reading
Businesses and the families that own them are each “governed” by a structure and set of rules. Often, that structure is informal and the rules unwritten, vague and inconsistently applied. This creates a virtual breeding ground for miscommunication, conflict and perceived (and actual) unfairness. Our clients have found that investing the time and e… Continue Reading
Just as a family strives to provide funding for opportunities, a family business should consider establishing funds as reserves for particular purposes. According to Ramez A. Baasiri, author of Interrupted Entrepreneurship, these funds will “allow you to cultivate the next generation so they can handle a broad range of interruptions in entrepreneu… Continue Reading
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
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