Despite
the entrepreneur’s plans to pass the company on to the next generation, the
truth is that the majority of family-held businesses don’t make it past the
first generation.
Some businesses make it from generation to generation because the founder is
intent on creating a family legacy or the next generation is intent on carrying
on that legacy. Shareholder agreements are commonplace in those companies that
do make it through generations. Buy-sell agreements which dictate who, how,
when and to whom stock can be sold become a family protection umbrella that
ensures that stock remains within the family and the company.