Pruning the Tree of Business ; Family Fortunes

Summary

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AS a family business evolves, the shares tend to be spread amongst a wider group of individuals. This can include cousins, in laws, former and current employees, aunts and uncles, as well as brothers and sisters.

Some of these may be actively involved, whilst others may have a shareholding which means little to them. Such businesses have to ask 'How does it actively engage with the shareholders so that they all understand and agree on the purpose of the family business?' Also, 'What if some of the shareholders are not interested and would prefer to realise some capital?' Or the management may feel the widely diversified shareholding makes it too cumbersome to effectively manage the business. The answer may be to prune the ownership tree.

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Extract

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Pruning the Tree of Business ; Family Fortunes

However, buying out some shareholders means somebody having t...

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