Separating ownership from management
A family member may inherit shares without being the right person to run the business, and the right manager may not be a family member at all. A workable plan addresses both, and says so clearly in the documents.
Documents that need to work together
- The company's constitutive documents and any shareholders' agreement.
- Any transfer restrictions or pre-emption rights over shares.
- The founder's will and any trust arrangements.
- Key contracts that may be affected by a change in control.
Practical steps
- Identify who is intended to own and who is intended to lead.
- Review the constitutive documents against that intention.
- Align the will and any trust structures with the corporate documents.
- Begin transition of responsibility before it becomes urgent.
- Communicate the plan to those affected.