Scholars, researchers and consultants agree on the uniqueness of the family business and its predominance in the world market. Despite this recognition, a wide void emerges as a legal and financial well-defined differentiated entity.
Although, countless endeavors have been taken the road to draw up the right definition for the family business; some prevail family over business, or vice versa. However, nobody denies that the soul of the family is what leads every single detail in the business, and differentiates family businesses from other non-family counterparts. Such a factor was recognized by the scholars by the concept of “Familiness”. It is worth noting that this concept may be a source of vulnerability and threat (nepotism, opportunism, power-abuse, conflicts, etc.) or opportunity (transparency, trust, altruism, etc.). All depends on the way family decision-makers run the business and its decision making process and techniques adopted.
Despite the characteristics that distinguish family businesses, namely flexibility, informality and quick decision, long termism, still any decision-made obliges the family business towards its stakeholders. The mandatory factor within the family business has three concerns, namely values, interest and law. When Values prevail depending on the family business generation that leads the business and the sense of belonging to it, the interest concern varies between the individual interest, the family interest, the business interest. As for the legal concern, it is translated by the binding act out of respect or fear of penalty. Still, the bad intention and opportunism in these three concerns may manifest the economic and social instability and insecurity; so family dissociation and wealth dissipation.
Accordingly, family businesses need to be legally recognized to avoid the ambiguity that leads its road. The legal perspective and approach are considered significant to protect this enterprise, to enhance its operation, and to generate legal consequences in a safe mode.
This will be my engagement with my readers so we nurture a tailor-made legal culture of rights and obligations towards the family business community.