Family Business

Family businesses in Spain make up 89% of the total number of companies in the market and the weight of their activity is equivalent to 57% of the private sector's GDP. All sectors of the Spanish economy have a high presence of family businesses. In this sense, the construction, trading, agriculture, and industrial sectors are particularly noteworthy.

In 90% of the cases, the director or CEO of the family business belongs to the owner family, and over 53% of them are still managed by the first generation of owners.

One of the advantages of family businesses is their focus on a specific territorial area, which opens an opportunity: internationalization. Only 11.3% have a presence outside Spain.

Family businesses are currently undergoing a generational change in ownership and management. This means that the new generation comes with a change in expectations in the way the business is managed. This generational change implies in many cases a new commitment to growth and international expansion. In other cases, the replacement generation is not willing to continue the business and therefore opportunities arise for investment through the acquisition of consolidated businesses with expectations and possibilities for growth.

With our specialized team, we offer our clients our legal advisory services in the generational transition and national and international expansion of family businesses. Our experience allows us to understand the challenges of the business and to accompany our clients in overcoming them.

FAMILY PROTOCOL

89% of the companies in Spain are family-owned businesses, which represent 67% of private employment, and is equal to 7 million jobs that generate 57% of the Spanish GDP. This type of business combines three important components: family, ownership and business. In many cases, these components make the development process difficult, so it is common that out of every 100 family businesses that approach the second generation, only 30 survive, and of these, only 15 continue until the third generation. It is here where the figure of the family protocol emerges.

The family protocol implies drafting a strategic family program that allows for the establishment of mechanisms that regulate the succession of the family business, the economic matrimonial regime of the family members, the government and management of the family business, the resolution of conflicts or, among many others, the transfer of shares between the different family branches.

This figure allows family businesses to face specific challenges, such as defining a shared vision and values, planning and successfully overcoming the generational change, attracting, selecting and retaining the best talent, harmoniously managing family-business relations, emotional issues in the face of business and property issues, as well as the challenges that arise in all types of companies such as expansion and globalisation.

A family protocol seeks to satisfy 4 objectives: to define a vision and values shared by the family, to promote cohesion and the commitment to the family business with a common business project, to favour the continuity and viability of the company and its governance through planning that facilitates generational change, and to preserve and pass on the legacy.

In order to guarantee its compliance, it is essential that in the process of drafting the family protocol all the generations that are and will be shareholders in the family business participate and are actively involved.

Therefore, the family protocol constitutes the document that culminates and embodies the consensus reached among all participants and in turn represents the beginning of a new stage for the family business.

In order to draft a family protocol, the following phases must be completed: becoming aware of the need to establish a strategic family plan, assessing the initial situation of the family business (strengths, weaknesses, conflicts, solutions, etc.), drafting and executing the protocol, and finally, executing and adapting the development tools.

The by-laws should not be confused with the family protocol, as they are different legal instruments. However, it is possible to configure the obligation to comply with the family protocol as an ancillary obligation within the by-laws, in order to guarantee compliance with the family protocol by the family business.

Family Business

FAMILY PROTOCOL

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In order to guarantee its compliance, it is essential that in the process of drafting the family protocol all the generations that are and will be shareholders in the family business participate and are actively involved.

Therefore, the family protocol constitutes the document that culminates and embodies the consensus reached among all participants and in turn represents the beginning of a new stage for the family business.

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