Blog Article

16 May 2024 | Business Acquisition

5 Must-Ask Questions for Future Shareholders to Ensure a Smooth Family Business Transition

Most of the companies I work with are family-owned with 1 and sometimes 2 generations working in the business.

The owner(s) and the future owner(s) have a responsibility for a smooth transition. Unfortunately, that’s not always the case. I biggest challenge that I’ve seen is a simple lack of communication.

If you are a Future Shareholder here are 5 Must-Ask Questions for a Smooth Transition.

Being a shareholder-in-waiting isn’t always a walk in the park. You’re in a delicate spot—ask too much, and you’re seen as “entitled,” ask too little, and you might be caught off guard when inheriting family assets. Here’s the scoop:

1️. What’s the family member gifting shares really after? Start with this simple question to understand their goals. Keep it in plain language to avoid misunderstandings. It’s vital to avoid surprises or conflicts down the line. There may also be family members who have no interest in or are part of the business. How do you treat them fairly?

2️. Do you grasp the jargon used by lawyers and advisors? Legal documents can be confusing. Don’t hesitate to ask for clarification. Clear communication is key to preventing confusion. Even if you have the ask the same question 6 different ways. Make sure you fully understand. Don’t assume.

3️. Will the late family member’s plans actually work? Sometimes, various legal documents can clash or lose effectiveness over time. Gather the family, clarify roles, and plan for the future to avoid complications.

4️. Who’s watching for unintended consequences? Advisors may set up plans without knowing all family members. These dynamics can be overwhelming during a loss. Make sure everyone understands and is on board with the plans. Your lawyer, accountant, and insurance advisor should all be brought in early.

5️. Who’s resisting the conversation and understanding? Identify resistance sources and approach them with empathy. Transparency and clarity can often resolve resistance.

Family transition can be complex, but thoughtful questions can help maintain family unity and enterprise harmony.

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The views expressed in this article are for informational purposes only and do not constitute insurance advice. Readers are encouraged to contact a representative from Benchmark Insurance Ltd. directly for personalized insurance solutions tailored to their individual needs. Benchmark Insurance Ltd. is a niche insurance agency offering Life, Critical Illness, Long-Term Disability, and Group benefits to individuals and businesses across Ontario. To learn more about our services and how we can assist you, please reach out to us at or call 647-955-1242.

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