Set family business rules clearly and early

The bitter family feud between Gina Rinehart and her children is embarrassing and ugly. All families have their internal tensions, but money magnifies everything and can turn a little argument into a war for control.

If you are in business with your family, you’ll know that it is almost impossible to treat your relatives like other employees. There’s just too much history.

But you can minimise any potential angst by using a family version of the common shareholder agreement.

This should set out who in the family does what, gets paid what and is entitled to what. It should set out how family members can exit and enter the business. It should explain how key management decisions will be made and how disputes will be settled.

Get a trusted third party adviser to draw up the agreement so it if fair to all and understood by all. Then make sure everyone is behind the document.

Knowing where you stand with fellow investors is always important and with families it is crucial. Having processes to resolve problems will help keep everyone on track – and together at the dinner table.

Get it done – today!