Our latest insights

Hearing the words ‘Division 7A’ is often accompanied with a twinge of anxiety – and for good reason. This area of tax legislation is incredibly complex, and for family businesses, Division 7A can be a particularly difficult concept to navigate.

When families come into large sums of money – typically from the sale of a business or property – the question often arises: ‘Do I gift this money now to my family or do I wait and include it in my estate?’

‘We have always done it that way.’ The seven most expensive words in a business, remarked Janine Allis from Boost Juice at the recent Family Business Australia conference.

While conflict happens, how you manage it can be the difference between a business (and family) that thrives, and one that becomes destabilised.

Next generations are itching to take over – the question is are they ready? Future leaders should allow at least three to five years to demonstrate their credibility and develop leadership skills. There are high expectations of the next generation’s business acumen, financial and industry understanding, the ability to lead and inspire, and capability to overcome hurdles. Taking over the family business is a process that often spans across a number of years, and can be separated into succession of management (that is, responsibility and authority), and succession of ownership.

The complex multi-generation relationships in a family business define their success – and often underline their failures

How to finance the transition of a business through generations can be one of the fundamental challenges encountered in an effective succession plan.

Well over half of all Australian family businesses do not have processes in place to deal with conflict, to clearly express the aim and goal of the business and to allow for transition and succession. Consulting a third party facilitator can assist with the formation of a governance structure. A facilitator provides a layer of independence as they are not emotionally involved, and serve in holding the family accountable, aiding in dealing with more sensitive matters.

There is an increased importance for the boards of family businesses to find the right balance between compensation for the management team working in the business, and earnings for the family shareholders who own the business. It is likely that some family members will be involved in both aspects which heightens the challenge of distinguishing the return. There are several ways for family business owners to approach these challenges.

A family’s legacy – or wishes for its legacy – are as unique as each family itself.

Aspects to consider and questions to ask yourself when developing a family office.

The Australian family business doesn’t just mean the café down the road. Spanning nearly every industry and size, the nimble nature of family businesses has meant that many have thrived during COVID – some even more so than their more corporatised competitors.