A family charter or family covenant is a document that sets out how the family will deal with the family business and vice versa. It can also address how the family will deal with private matters, such as wills, gifts, marriages, investments and even spending patterns. A family status is always tailor-made; after all, every person, every family and every company is different.
Themes to consider when drawing up a family status are:
- vision for the future and objectives of the family business;
- values and rules of conduct of the family and of the family business;
- regulation of ownership and control
- career in the family business;
- salaries and allowances for family members;
- leadership of the family business by family and/or non-family members;
- process of transfer and succession in leadership and ownership;
- consultation, information and decision-making within the family.
A family statute is not so much about the document itself but mainly about the path towards it. This is a path that the family takes together so that the outcome is a document supported by everyone at the time. It may contain hard (enforceable) but also softer (non-enforceable) agreements.
A family status is often elaborated in:
After its creation, it is important to discuss the family status annually to assess whether it is still supported by everyone and/or needs to be amended.
For more information on drawing up, maintaining and elaborating a family status, please contact us. We will be happy to advise you.
