- April 30, 2014
- Posted by: essay
- Category: Term paper writing
The family business can sign contracts and agreements and customers. However, agreements and contracts should be signed only on the condition of the agreement of all four family members involved in the family business. The family business can sign contracts and agreements with different companies, businesses and customers. The collective involvement of family members in agreements and contracts is essential for the legal and reliable business contracts and processes. The development of the business is impossible without business contracts and agreements. However, the collective decision making process is the key for the business development and family members take decisions on contracts and agreements collectively.
Ownership of family business
The ownership of the family business is collective. Each family member has equal share in the business. Four family members have the full control over the entire family business. In this regard, each family member owns 25% of the family business. The ownership of the family business cannot be changed. Family members cannot change their share of business. However, they can make the will and leave their share of business to individuals defined by family members in their will. Family members cannot sell their share of the family business or present their share of business as a gift. The change of the owner or owners of the family business can occur only after the death of the family member.
If the deceased family member did not leave a will or did not leave his or her share of the family business, other three family members have priority in taking control over his or her share of the family business. Therefore, family members have the priority in inheriting and taking control over shares of other family members.
The family constitution can be changed but rights and liberties of each family member cannot be limited after the change of the family constitution. Any changes to the family constitution should improve the family business and meet interests of each family member. Decisions on changes of the family constitution are unanimous that means that each family member should vote for the change. Changes can enroll new family members in the ownership of the business on the condition of the maintenance of the principle of parity and other fundamental principles of the business. Therefore, amendments can be introduced in the family constitution but the changes should be supported by all family members. The changes can improve the family business and respond to challenges the family business may face in the course of its development.