Confianz

Etiqueta: empresa familiar

  • Transfer of tax liability to directors following rulings in 2025

    The transfer of tax liability to directors underwent a radical change in 2025. The Supreme Court handed down two rulings requiring the tax authorities to prove the specific fault of the director. It is no longer sufficient to have formally held the position.

    For years, the Tax Agency almost automatically transferred debts from insolvent companies to their directors. The procedure was simple: prove that someone was a director and that the company committed tax offences. From there, it was up to the director to prove their innocence. A virtually impossible task.

    The transfer of liability now requires actual proof of negligence

    On 20 May 2025, the Supreme Court handed down judgment 594/2025. The case involved a director from whom the tax authorities claimed more than €355,000 in VAT debts. However, when the tax inspection took place, this person no longer even held the position.

    The National Court initially supported the tax authorities. Its argument was that once the status of administrator and the company’s infringements had been proven, it was up to the person concerned to prove that they had acted diligently. The Supreme Court overturned this decision completely.

    The ruling establishes that the derivation of tax liability is punitive in nature. Therefore, it must respect the constitutional guarantees of Article 24 of the Constitution. Especially the presumption of innocence. This radically changes the rules of the game.

    Now it is up to the Administration to prove the director’s guilt. Generic phrases such as «did not supervise adequately» or «allowed the breach through his passivity» are not enough. The Treasury must specify which obligations the company breached, how the director should have intervened and how his conduct facilitated the infringement.

    The causal link must be clear and proven. If there is no connection between the director’s actions and the infringement, liability cannot be attributed. Furthermore, any reasonable doubt must be resolved in favour of the director under the principle of «in dubio pro reo».

    Supreme Court rulings protect against automatic derivations

    On 17 July 2025, a second ruling (3465/2025) was handed down. This time, the case concerned both section a) and b) of Article 43.1 of the General Tax Law. In other words, tax infringements and cessation of activity without dissolution.

    The Supreme Court reinforced its previous doctrine. Even in the event of cessation of activity, strict liability is prohibited. The Administration must prove that the administrator failed to perform their duties. It must prove that they omitted specific procedures within their power and that this omission caused the non-payment.

    A key point: the obligation to provide reasons lies entirely with the Administration. The courts cannot subsequently make up for what the Treasury failed to justify from the outset. If the referral agreement lacks sufficient grounds, it must be annulled.

    According to data from the Tax Agency, in 2022 there were 31,313 referrals of liability. This represents an increase of 7.7% compared to 2021. When compared to 2018, when there were 16,714 referrals, the increase is even more significant. These figures show that the Treasury is increasingly using this collection tool.

    The new rulings oblige the Administration to work harder and provide better grounds. The days of autopilot in tax liability referrals are over.

    How to protect yourself against liability referral proceedings

    For administrators, these rulings open up new possibilities for defence. Many referrals that are pending or have already been resolved could be appealed. This is especially true for those based on generic statements without concrete evidence.

    Prevention remains essential. If you are the administrator of a company in difficulty, document all your decisions. Take minutes of the administrative bodies’ meetings, recording the financial problems and the measures taken. This documentation may prove decisive.

    If the company is in the process of being dissolved, take action. Call a meeting to agree on the dissolution or file for voluntary bankruptcy if appropriate. Ceasing activity without taking any action is the most direct route to liability.

    If you decide to resign as director, document your reasons and notify the Companies Registry immediately. Your resignation must be registered in order to be effective vis-à-vis third parties such as the tax authorities.

    When you receive a liability referral request, analyse it carefully. Read what specific conduct you are accused of. If the agreement uses vague language without specifying what measures you should have taken, you have solid grounds for appeal.

    The liability transfer procedure lasts a maximum of six months. It begins with an initial agreement notifying the facts and scope. This is followed by a 15-day period for submitting arguments. Finally, the Administration issues a ruling.

    During this process, you can submit arguments and evidence. Do not waste this time. This is your chance to prove that you acted diligently or that you were not responsible for the breaches.

    At Confianz, we have been advising family businesses and SMEs in complex situations for over 30 years. We have in-depth knowledge of these procedures and know how to defend you. Our specialised team analyses each case individually. We do not apply generic formulas.

    We assess whether the referral agreement complies with the new Supreme Court standards. We identify formal defects, limitations or lack of motivation. And we design a personalised defence strategy to protect your assets.

    The 2025 rulings have changed the landscape. Administrators now have better tools to defend themselves against the tax authorities. But you have to know how to use them correctly and at the right time.

    You can see more on our YouTube channel.

  • Key points for preparing your family business for restructuring

    In Spain, family businesses are the backbone of our economy: more than 1.1 million companies representing 92% of the business fabric and generating 70% of private employment. With such significant figures, any restructuring process in this sector has a fundamental impact not only on the business families themselves, but on society as a whole.

    However, the reality is stark: only 29.3% of family businesses manage to survive at least one generational change, and barely 1.2% reach the third generation. Recent cases such as Celsa, Naviera Armas and Rator remind us that poor planning can lead to loss of family control, destructive conflicts and erosion of business value.

    Anticipating restructuring is a necessity if you want to protect the value, continuity and legacy of your company, as we have also explained in our video podcast. This list will help you prepare for an orderly, efficient restructuring with control over the process.

    1. Analyse your financial situation objectively

    Before making any structural changes, you need a complete, unfiltered financial overview. Review your current liquidity, debt levels, operating cash flow and profit margins. Do not settle for the data you already know: request independent analyses that include optimistic, realistic and pessimistic projections.

    Practical tip: Prepare an up-to-date financial dossier that you can present to potential investors, partners or financial institutions. In 2023, 43% of mergers and acquisitions in Spain involved family businesses, demonstrating the constant activity in this sector.

    Checkpoint: Are you clear about your self-financing capacity for the next 24 months?

    2. Assess the corporate and governance structure

    Your current structure may be a legacy of the past, not the solution for the future. Review whether the share distribution, shareholder agreements and family protocols are aligned with your current objectives. Many family businesses have complex structures that hinder agile decision-making.

    Practical tip: Map out who has real decision-making power, who can block operations, and what mechanisms exist to resolve conflicts. If there is no up-to-date family protocol, developing one should be a priority.

    Checkpoint: Does the current structure facilitate or complicate the strategic decisions you need to make?

    3. Prepare a tax assessment prior to any changes

    Tax surprises can ruin even the best restructuring. Anticipating this means identifying potential hidden capital gains, optimising asset transfers and assessing the tax implications of mergers, spin-offs or changes of control. A poorly executed spin-off can generate unnecessary tax costs that compromise the entire operation.

    Practical tip: Work with tax advisers who specialise in family businesses to model different restructuring scenarios. Each alternative should include its actual tax impact, not just the operational advantages.

    Checkpoint: Do you know the tax cost of each restructuring option you are considering?

    4. Assess your workforce and internal leadership

    Even the best restructuring plan will fail without the right team. Assess whether your current workforce, especially the management team, can sustain a new phase or operating model. Internal conflicts and a lack of prepared leadership are common causes of failure in restructuring.

    Practical tip: Identify key professionals whose departure could jeopardise the operation. Develop specific retention plans and assess whether you need to bring in external talent for critical roles.

    Checkpoint: Do you have the leadership necessary to execute and sustain the planned changes?

    5. Communicate clearly and in a timely manner

    Lack of internal communication breeds resistance, talent drain and destructive rumours. Poorly communicated restructuring can become a self-fulfilling prophecy of failure. Employees, partners and stakeholders need to understand not only what is going to change, but why it is necessary and how it affects them.

    Practical tip: Design a communication plan with differentiated messages for each audience: business family, employees, customers, suppliers, and financial institutions. Involve key leaders from the beginning of the process.

    Checkpoint: Do you have a structured communication plan that prevents speculation and rumours?

    6. Consider the family and generational context

    Almost 70% of family businesses do not survive the first generational handover. Unresolved family tensions can explode during a restructuring, turning a business process into a destructive personal conflict. It is essential to separate family dynamics from business decisions.

    Practical tip: If there are underlying family conflicts, resolve them before beginning the restructuring. Consider professional family mediation and establish clear decision-making mechanisms that do not depend on complex family consensus.

    Checkpoint: Are family relationships an asset or a risk to the restructuring process?

    7. Design a structured plan with timelines, responsible parties and scenarios

    Restructuring without a plan is costly improvisation. You need a clear roadmap with specific milestones, defined responsibilities, and alternative scenarios. Planning in advance is always better than deciding in a crisis, when options are limited and costs multiply.

    Practical tip: Develop a realistic timeline that includes time for negotiations, due diligence, legal procedures, and organisational adaptation. Each phase should have measurable success criteria and review points.

    Checkpoint: Do you have a detailed plan that you can follow and adjust as circumstances evolve?

    8. Seek legal, tax and financial advice from the outset

    The cases of Celsa, Rator and Naviera Armas demonstrate the serious consequences of inadequate planning. Reactive restructuring, managed under pressure from creditors or crises, dramatically limits options and can result in the loss of family control.

    Practical tip: Seek out advisors with specific experience in family businesses and restructuring. Not all professionals understand the particularities of managing family and business interests simultaneously. The difference between planned and reactive restructuring can be the survival of your business.

    Checkpoint: Do you have a comprehensive advisory team that understands both the technical aspects and family dynamics?

    Your next step

    A well-prepared restructuring preserves value, talent, control and family legacy. On the contrary, failing to anticipate can lead to destructive conflicts, costly litigation, loss of control and an unnecessary tax impact that compromises the future of your company.

    Remember that in a planned restructuring, you maintain control of the process and decisions. In a reactive one, others set the timing, conditions, and outcomes.

    Does your family business need to reorganise or prepare for a new phase?

    At Confianz, we can help you structure the process with a global vision and a practical approach. Request a personalised diagnosis.

  • Alignment between ownership and management in family businesses

    In Spain, according to recent data, up to 30% of business activity may be compromised by a lack of understanding between owners — often members of the founding family — and professional managers. This disconnect, invisible in day-to-day operations, often emerges at critical moments: a merger, an acquisition, a succession. This is when the lack of structure turns into conflict, and tradition clashes with efficiency.

    The silent risk of dual governance

    Family businesses operate according to a dual logic: on the one hand, the owning family, with its values, history and personal expectations; on the other, the executive management, responsible for making decisions based on profitability, growth and sustainability. In theory, both sides should be aligned. In practice, this is not always the case.

    Dual governance creates tensions when there is no clear structure. For example, it is common for family members to demand results without actively participating in management, or for managers to have their decisions questioned by those who do not hold formal positions. In M&A processes, where agility and strategic focus are vital, these frictions can delay key operations or even cause them to fail.

    The problem is not the existence of this duality, but its disorganisation. Alignment between ownership and management in family businesses requires mechanisms that channel family participation without interfering with professional management.

    A critical snapshot of family businesses in Spain

    Understanding the root of the problem requires looking at the present. Fifty-three point six per cent of family businesses in Spain are in their first generation, and 37.2 per cent are in their second. Only a meagre 2 per cent survive to the fourth generation. This is not due to a lack of talent or vision, but rather to a lack of institutional preparation for succession.

    Seventy per cent of first-generation family businesses lack a succession plan. The result? Conflicts, improvised decisions and operational paralysis.

    At the same time, these same companies are key players in the market: in 2023, 43% of mergers and acquisitions in Spain were carried out by family businesses. They even surpassed private equity and large corporations. This demonstrates two things: their relevance and their vulnerability.

    When a family business enters an M&A process without clear governance, the risks multiply. The lack of alignment between ownership and management in family businesses can slow down decisions, divide partners and dilute the value that took so much effort to build.

    Consequences of internal misalignment

    The lack of alignment between ownership and management in family businesses has tangible consequences, which are sometimes irreversible. A recurring example is strategic decisions being blocked by generational differences. Parents want to keep the business as it is, while children are committed to growth through acquisitions. Without clear rules, immobility wins. Or worse: a breakup occurs.

    In other cases, the absence of a family protocol leads to legal disputes. Companies that could have grown or diversified their activities end up being sold to third parties because of an inability to agree on a common direction. Emotional value is not enough when there are no mechanisms in place to resolve disagreements.

    There are also situations where professional managers leave the company because their judgement is constantly questioned by family members with no training or executive responsibilities. The loss of management talent in these cases costs more than a bad investment.

    These conflicts do not arise overnight. They are the cumulative symptoms of poor governance. And their cost is extremely high: not only in economic terms, but also in terms of reputation and emotion.

    Professionalisation and clear structures

    Alignment between ownership and management in family businesses does not happen by inertia. It requires specific decisions. The first is to professionalise management. This involves bringing in external managers with experience and, above all, objectivity. It is also key to integrate independent directors into the board of directors to provide strategic vision beyond the family name.

    The second step is to clearly define roles. Who makes decisions? What powers does the family have? What powers does management have? This is where the family protocol becomes indispensable. When well designed, it acts as a coexistence agreement: it regulates expectations, sets rules for participation and establishes mechanisms for resolving differences without taking them to a personal level.

    The third pillar is the corporate structure. Many family businesses operate as if they were sole proprietorships, but growth requires more solid vehicles. The creation of a family holding company allows for the separation of operational management from asset management, facilitates generational succession and optimises taxation. It also allows for professionalisation without losing control.

    Govern with vision and without fear

    Aligning ownership and management in family businesses is the main strategic challenge of our time. It is no longer enough to have good products or a history of success. What ensures continuity is the ability to transform that legacy into a functional, clear and future-proof structure.

    At Confianz, we have been supporting family businesses in this process for years. With solutions tailored to their reality, their values and their long-term vision. If your company is facing this dilemma, don’t put it off. Let’s talk.

  • The rise of M&A in Spanish family businesses in 2025

    The rise of M&A in Spanish family businesses in 2025 is the result of a structural transformation. Family businesses, which account for 92.4% of the business sector in Spain and generate 70% of private employment (Family Business Institute, 2025), are leading a new cycle of growth.

    According to the report by Maio Legal and Strategy with Purpose (2025), 27% of family owners are planning acquisitions, while 29% are leaning towards strategic alliances. This dynamic reflects a new mindset: less conservatism, more forward-looking.

    Family fusiness drives mergers and acquisitions

    In 2023, 43% of M&A deals in Spain involved family businesses, surpassing private equity (26%) and industrial corporations (19%), according to the INE. This is not anecdotal: it is a solid trend that continues in 2025.

    The report M&A and family business: how to align ownership and management at the moment of truth points out that this boom is supported by a favourable financial context. Corporate indebtedness fell for the second consecutive year to 64.7% of GDP, the lowest level since 2001 (Bank of Spain, quoted by Cinco Días, 31 May 2025).

    But there is more to the story: a generation of business leaders – mainly baby boomers – are now facing key decisions about the future of their businesses. Expand? Find a partner? Sell? For many, M&A becomes the structural answer to these dilemmas.

    Leading sectors and real opportunities

    The rise of M&A in the Spanish family business in 2025 is more visible in fragmented sectors, in consolidation or with technological pressure. According to Business People (2 June 2025), the clearest opportunities are in:

    • Energy: The energy transition requires financial muscle and technical know-how. Many family-owned SMEs are merging or integrating renewable projects to stay competitive.
    • Technology: Digital change is no longer optional. Traditional companies are acquiring technology start-ups to update processes, sales channels and business models.
    • Pharmaceuticals: The concentration of laboratories and distributors is driving acquisitions to gain scale, diversification and access to R&D.
    • Agri-food and manufacturing: Sectors where global competition and tight margins are pushing for integrations. Here, many family-owned companies seek to lead consolidation, rather than be absorbed.

    Maio Legal and Strategy with Purpose note that the most active family businesses share a pattern: sound financial structure, strategic vision and professionalised governance. The key is deciding whether to lead change or to give ground to external capital.

    Succession

    While the enthusiasm is real, so are the challenges. The biggest internal hurdle remains succession. According to the Family Business Institute (2025), 70% of first-generation family businesses do not have a defined succession plan. This puts their continuity beyond the founder at risk.

    EY and the University of St. Gallen, in their Global Family Business Index 2025, warn that only 30% of these companies manage to survive the transition to the second generation. The lack of alignment between family and professional management can have a direct impact on daily operations, slowing down up to 30% of the activity (Maio Legal, 2025).

    This emotional and structural environment makes any M&A process a complex decision. It is not only about growing or selling, but also about redefining the role of the family, professionalising corporate governance and avoiding internal tensions.

    As Nuria Morcillo points out in Cinco Días (31 May 2025), «M&A in family businesses is not a simple transaction. It is an identity transformation that requires maturity, advice and business vision».

    At Confianz we have accompanied hundreds of companies in merger, acquisition or restructuring processes, combining strategic vision, legal knowledge and family sensitivity. If you are evaluating growth or restructuring, let’s talk. We can help you make decisions.

  • ICEX High Impact Competitiveness Plan 2025

    The ICEX High Impact Competitiveness Plan 2025 is a real opportunity. A response with money, ideas and tools for Spanish companies -especially SMEs and family businesses- to survive, grow and go out into the world in earnest. But it is important to understand it well. Even more so if you are affected by tariffs, increasingly tight margins or the bureaucracy that hinders every attempt at internationalisation.

    The ICEX High Impact Competitiveness Plan explained 

    Yes, the name is long. But what lies behind it is quite straightforward: more than 14 billion euros in two phases. One to protect, one to push. Translated: if your company is suffering from tariffs, volatile markets or lack of muscle to internationalise, here’s something you can use.

    There is personalised attention for 500 large exporters to the US (the ICEX500), but also for hundreds of SMEs that are ready to make the leap or simply survive with fewer shocks.

    Do you run a family business, make something good but don’t know where to start with the outside world? This plan is not only for those who are already abroad. It is also for those who want to get there but don’t know how. Or for those who have made it, but are now squeezed by margins and regulation.

    What makes this plan different?

    First, there is urgency. There is a network of protection, funding, technical support and training designed to act now. And then there is the underlying approach: creating more resilient businesses. That sounds like a buzzword, yes, but it means something very concrete. Don’t get knocked down by the next global scare. That your business can continue to operate even if the environment gets tougher (and it will get tougher).

    The Tariff Impact Observatory will meet every month. Why does it matter? Because it detects risks in real time and adjusts. It’s like having a radar on so you don’t eat the iceberg.

    Then there is the Brand & Innovation programme. Every year, 250 business leaders will receive practical training in strategic positioning. Which is what it takes to stand out when you’re competing with half the world.

    And what’s more: 700 SMEs will be supported to obtain an official rating, which is key if you want to finance yourself or sign up with demanding clients outside Spain. There will also be acceleration for 200 startups with access to international funding and mentoring.

    Are you worried about bureaucracy? Under the «Regime 20» initiative, work is being done to reduce absurd red tape that slows down businesses: approvals, permits, duplication. Less friction, more action.

    How SMEs and family businesses can take advantage of it

    This plan may seem to be designed for large companies with international departments and in-house lawyers. But it is not. It is especially aimed at SMEs and family businesses. The ones that most need real support and less technicalities. The ones that have no time to waste.

    Let’s take a case: an industrial SME in Zaragoza that exports components and sees how tariffs in the US are eating into its margins. With the ICEX plan it can:

    • Get advice on how to reorganise your logistics chain.
    • Access forums with business advisors from 40 countries.
    • Training in differentiation strategies.
    • Obtain alternative financing.

    Or an agri-food company in Murcia that exports only to France and Germany. With this plan, you can:

    • Diversify towards Latin America or Asia, with real market intelligence.
    • Participate in mentoring to redefine your international value proposition.
    • Enter networking networks that were previously inaccessible.

    And you don’t have to do it alone. That’s what programmes like the ICEX500 or access to public financial instruments are for. The aim of the ICEX High Impact Competitiveness Plan 2025 is not only to put resources on the table, but also to help you use them well.

    Because growing abroad requires structure, taxation, branding, strategy… and a lot of resistance.

    At Confianz we know how difficult it is for a family business to adapt to a complex global context. If you are interested in understanding which part of the ICEX High Impact Competitiveness 2025 Plan is right for your company, let’s look at it together. We bring it down to earth. And we help you apply it with strategy and common sense.

  • How to ensure the survival of the family business in 2025

    Family businesses in Spain support 92% of the business network. But in 2025, survival will require much more than just endurance. Effort and tradition are not enough. Change is becoming a matter of life and death: the survival of the family business today is not a matter of faith, but of strategy. And whoever understands this in time, wins.

    Family businesses need muscle to survive

    Today, surviving means growing up. It is not a desire, it is an obligation. Family businesses are still smaller, less international and less technological. This triple handicap makes them vulnerable.

    The fact is clear: 94.5% of microenterprises are family-owned, but only 1% of large companies are family-owned. This is no coincidence. It is a symptom that size matters. A lot.

    Small family businesses feel that their essence lies in their human size. And that is true. But that essence cannot be an excuse for not expanding, for not professionalising their management or for not internationalising their activity.

    Did you know that family businesses that manage to grow are also more profitable than non-family businesses? Growth not only protects: it multiplies value. However, to get there you have to make uncomfortable decisions: opening up to external partners, betting on new markets, investing in technology when you can’t yet see the return.

    At Confianz we analyse, propose realistic plans and execute. We know that every family and every company is unique. And that is why each strategy is unique too.

    The generational handover 

    Who will be running your company in ten years’ time? This question terrifies many family entrepreneurs. And no wonder. Only one in three family businesses makes it through the first generation.

    Many think that it is enough to leave the company «at home». But the family name does not guarantee leadership.

    The new generation not only needs to know the company: they need training, management skills, strategic thinking and digital vision. Not preparing the successor is like flipping a coin with the company at stake.

    Moreover, the handover must be managed in two dimensions: business and family. Clearly separating family interests from business interests is vital. Family protocols, well-defined governing bodies and clear rules are the basis.

    We support our clients in their succession processes from a 360º perspective. It is not just a matter of transferring ownership, but of ensuring that the succession strengthens the project. That there are no heavy inheritances or open conflicts. The aim is not to pass the baton: it is to pave the way.

    Without innovation, the family business disappears within 10 years

    Innovation is not a luxury. It is a matter of pure survival.

    The report «Relevance and Survival of Family Businesses» reveals that only 4.5% of family businesses are present in technology-intensive sectors. That means being left out of the great opportunities of today and the future.

    And we are not just talking about developing new products. We are talking about transforming internal processes, adopting digital tools, using artificial intelligence, managing customer data in real time, automating repetitive tasks.

    Digitalisation is no longer an afterthought. It is at the heart of any growth strategy. Family businesses that have chosen to integrate technology show higher rates of profitability and resilience.

    Of course, transforming a family business does not happen overnight. It involves overcoming internal resistance, training teams, redefining roles and investing for the long term.


    In 2025, it is not the one who has been open the longest that survives. Those who know how to read change and act fast will survive.
    Family businesses have proven to be longer-lived than non-family businesses. But this historical advantage will not work if it is not updated.

    Do you have doubts about how to secure the future of your company? That’s normal. The important thing is not to stand still. If you want to start building a stronger future for your family and your business, let’s talk. We’re here to help.

  • Frequent conflicts in the family business and how to avoid them

    Like any other organisation, family businesses are not exempt from conflict. And since disputes are inevitable, the smart thing to do is to embrace them as an opportunity for change, organisational strengthening and growth.

    4 possible causes of conflict in a family business

    In the family business, emotional and business factors are intertwined. As a result, these are four of the most commonly encountered conflicts.

    1. There is no common goal

    When each member of the entrepreneurial family has his or her own personal goal, it is easy for them to rebel against any decision that does not help them achieve their objective. For this reason, it is essential to define a vision and a business culture agreed with all members of the family so that personal needs take second place.

    2. Lack of a good definition of roles

    In family businesses there is an overlap between two organisms of which the same people form part: the family, which is based on emotional ties; and the company, which is based on hierarchical roles. To avoid conflicts that can easily spill over to the family level, it is essential that there is a clear definition of roles and responsibilities in the company and that appointments based more on family relationships than on professional competence are avoided. The creation of a family protocol is a way to ensure that all family members are aware of the company’s operating rules.

    3. The always complicated succession

    The transition from one generation to the next at the top of the family business is one of the most delicate moments for this type of company. To avoid struggles for control of the company, it is advisable to plan the succession process in advance. However, sometimes this preparation is delayed because the next generations are not interested in taking an active role in the company or because the founder himself does not want to lose his status. Nor should we fail to foresee the possibility of a forced succession due to a sudden and unexpected event, such as the sudden disability or the unforeseen death of the entrepreneur. In these situations, having a roadmap that stipulates the steps to be taken can make the difference between the survival or death of the family business.

    4. Communication problems

    Smooth communication is essential for good understanding and good governance of the company. Family councils should serve as forums for discussion to mediate and resolve disagreements. However, lack of communication between members of the business family is another common source of conflict. Verbal communication is often abused to the detriment of written communication and there are difficulties in maintaining frank and open dialogues. It is advisable to encourage training in effective communication, negotiation and conflict resolution skills to help separate the personal from the professional.

    How to anticipate the emergence of conflict

    If not dealt with in time and in an efficient and orderly manner, conflicts can fester and become chronic, even leading to the end of the family business. But it is even better to prevent their occurrence with the necessary legal instruments.

    Using a consultancy firm specialising in family businesses such as Confianz can be useful for dealing with the process of creating the family protocol, family pacts, succession pacts, etc. Also, in the case of more complex conflicts, to mediate and reach consensus solutions avoiding misunderstandings or even sanctions due to ignorance of legal regulations.

  • Business family members on the steering committee: pros and cons

    By definition, a family business is one in which a business family is the majority owner. However, when it comes to the administration and management of the company, the entrepreneurial family can have a varying level of involvement in the corporate governance bodies. In this article we ask specifically what the presence of members of the entrepreneurial family on the management committee should be.

    Functions of the steering committee 

    The management committee arises from the need to coordinate the different specialised departments that emerge as the company grows. It is made up of the general manager and the directors of marketing, administration, export, production…

    This body is the highest executive body of the family business and has a dual function. On the one hand, it promotes collaboration between the heads of the different areas of the company, providing them with an overall vision. On the other hand, it is responsible for implementing the strategies proposed by the board of directors and managing the day-to-day running of the company.

    How the entrepreneurial family is integrated into the steering committee

    While the board of directors usually consists wholly or partly of members of the entrepreneurial family, this is not always the case for the management committee.

    Some family businesses decide that the entire management team should be made up of family members. Others opt for the opposite, forming a team of external executives. Finally, there are others that mix family and non-family members on their management committee. There is no single right decision in this respect. Each family business must choose the right option according to its needs and idiosyncrasies, and all have their pros and cons.

    Advantages and disadvantages 

    When most or all members of the management committee are members of the business family, there is a better natural alignment between the interests of owners and management. However, having mostly family managers also has its drawbacks. Because belonging to a business family is not necessarily synonymous with being a good manager. And personal factors tend to play a greater role in decision-making in family businesses than in other companies. Therefore, it is advisable to implement a process of continuous self-assessment and act accordingly.

    The support of the entrepreneurial family for the common project is undoubtedly a valuable intangible. However, it can sometimes work against the professionalisation of the company if not all members have the required experience and training.

    Another potential risk is excessive complacency. For example, when all members of the management committee are family members, many companies dispense with the implementation of control and incentive systems. Because these are mechanisms that are often used to reconcile the objectives of owners and managers. However, it is advisable to set up monitoring methods and incentive programmes for family managers as well.

    Ultimately, strong family control of the company’s management does not have to be a negative thing. But it is necessary to seriously face the challenges it entails. At Confianz we have been working for years in the field of advising family businesses, helping them to achieve their strategic and business objectives and we would like to accompany you in the growth of your family business. Shall we talk?

  • Dealing with divorce in the business family

    In a business family, any divorce has important business implications. In this article we look at the different scenarios that can arise and how to anticipate them in advance.

    Two divorces for every three marriages

    This is a fact. The chances of a couple ending up separating are very high. According to data from the National Institute of Statistics, in Spain there are two divorces, separations or annulments for every three marriages. In 2022, 20% were conflictive dissolutions, while 80% of the cases were by mutual agreement. And it should be borne in mind that these data do not take into account unmarried couples, who for civil purposes can have the same consequences as married couples.

    For this reason, in the family business, it is necessary to be realistic and always make provision for the eventuality of a divorce within the family.

    What to do before and after getting married

    Community of property or separation of property?

    Divorce is prepared before the wedding. Because one of the most important factors in determining the fate of a business after a divorce is the applicable matrimonial property regime. The most common are:

    • Regime of separation of property. The assets of both spouses remain separate, although subject to certain duties of family protection.
    • Community property regime. This is the one applied by default in most of the Autonomous Communities, and it complicates things considerably in the event of divorce. Because it differentiates between the assets of each of the spouses and those of the marriage itself. Broadly speaking, each spouse keeps as his/her private property what he/she had before getting married. Whatever either of them earned during the marriage belongs to the community of property. In the event of separation or divorce, the assets of the marriage must be liquidated and divided equally.

    Marriage contracts

    Marriage contracts allow the spouses to regulate their financial relations. For example:

    • Applicable matrimonial property regime. At its most basic level, the marriage contract allows, for example, that instead of the community of property regime, the separation of property regime is applied.
    • Referential matrimonial adjudication. This makes it possible to anticipate the distribution of assets in the event of divorce. For example, it is possible to determine that one of the spouses keeps the business in exchange for a definite financial compensation.
    • Inheritance transcendence. Allows the inheritance improvements to be anticipated. For example, by reserving a higher share in the company for one or more of the children.

    It is important to note that an agreement may be granted before the marriage, but also at any time while the marriage is still in force. They are particularly advisable when the couple is going into a joint business or if one of the spouses has a business project.

    The family protocol

    Family protocols are covenants applicable to family businesses, useful to regulate the internal functioning. For example, they can define in detail the process of generational succession, requirements for entering or leaving the company, corporate culture…

    The ultimate aim of family protocols is to bring stability to the family business. For this reason, they are also key to avoiding part of the conflict in the event of separation or divorce.

    Other caveats

    Even in marriages in community of property, one of the spouses may contribute funds to the family business by reserving a right of reimbursement or by expressly declaring its privative character. Otherwise, it will be considered as a contribution of property and it will be difficult to prove its privative character in the event of divorce.

    In any case, each case and the circumstances of each company, marriage and individual must always be analysed separately. To avoid the family business being directly affected by the marital breakdown, it is key to seek specialist legal advice before mixing family and business.

  • Family protocol: the best way to ensure the survival of the family business

    I will never tire of repeating it: an orderly generational transition in management and ownership is perhaps the main key to the long-term survival of family businesses. And a very useful tool to achieve this is the family covenant or protocol, a comprehensive agreement in common for all members of the business family.

    What is the family protocol

    The family agreement or protocol is a set of carefully detailed agreements, and is an essential tool for planning and facilitating an orderly generational transition in the management and ownership of the family business.

    It is a legal document, but it is separate from the rules governing corporations and is not a legally binding document in all countries. However, it does have a strong moral commitment and can be part of broader legal agreements within the corporate structure of the company. Violation of the family protocol can lead to major internal conflicts. It is therefore important to provide for clear conflict resolution mechanisms and sanctions in case of non-compliance.

    Objectives

    The main objective of the protocol is to ensure both the internal cohesion of the family and the durability of the company within the family. To achieve this, it can be broken down into several secondary objectives:

    • Prevent disputes from arising. It does this by setting clear rules for interactions between family members, ownership and the company.
    • Ensure the sustainability and progress of the business. To this end, it dictates how the business should operate and the level of family involvement.
    • Forge a common project that strengthens family ties and fosters a unified commitment to the business.

    What content should be included in the family agreement or protocol

    Every family business is different. For this reason, the family protocol can and should cover a wide range of issues. From those of a legal nature, to ethical or moral issues, to the values and culture of the family, etc. Some of the points it usually covers are succession in the management and ownership of the company, family employment policies, distribution of profits, conflict management, responsibilities of family members and criteria to be followed in decision making.

    The formula to be used is the integration of contractual clauses signed by all family members. These have a binding effect between them and can influence other legal documents of the company, such as the articles of association.

    Unlike the partnership contract, which is an agreement that focuses on the creation and management of a business with the aim of distributing profits, the family agreement assumes that the company is already established and aims to harmonise the relations between the family members and their company. For this reason, no capital contributions are required from the signatories, as the family members have already been allocated their shares in the company.

    Family businesses are a living entity, so the protocol must be reviewed periodically to adapt to changes in both the family and the business.

    How to create a family protocol 

    Family businesses are complex and involve a mixture of personal and professional relationships. Therefore, it is highly advisable, if not essential, to have external advice from lawyers who are experts in family businesses. In any case, all family members with an interest in the company, from those who are active in its management to those who are simply shareholders or heirs, should be involved in the drafting. Because its successful implementation requires unanimous agreement.