Managing the transfer of a company to a sibling

October 14, 2012 12:14 PM

I have an acquaintance who is an only child and who works for a company (with around 60 employees) that is wholly owned by his father. As his father gets older and bored with the day-to-day workings of the company, he plans (while still healthy) to turn the company over to his son. This must happen all the time, so I am wondering whether people have written about different ways such a transition might be managed.
posted by retiree to Work & Money (5 answers total)

I work for my father's company and we are in the early stages of this. We're doing it through our accounting firm.

A Google search for "succession planning" is a good place to start. I'm interested to see what the rest of this thread will offer, thanks for posting this.
posted by futureisunwritten at 12:33 PM on October 14, 2012

Specifically "business succession planning"
posted by yclipse at 1:23 PM on October 14, 2012

You don't say what the friend's current role is with the company, or whether he had to work his way up to a senior position. Succession seems to work best if there is a long transition period with intermediate milestones for handing off authority. It gets really rough if the father has trouble letting go, or if they wait until he's incapacitated and everything gets dumped on Junior at once.

Here's an article on the subject from a couple of years back. Note that there are consultants and organizations who specialize in this.
posted by Longtime Listener at 1:27 PM on October 14, 2012

This is, as people have mentioned, succession planning, and this is something that absolutely must be done with the help of an accounting firm. The details will differ based on country etc, but it would almost certainly be wise to discuss this with an accountant earlier rather than later. As in, while the father is still invested in working for the company. I'd suggest whenever they next have a slow period in the business is the time to do it. (There are financial and non-financial reasons to do it earlier.)
posted by jeather at 1:29 PM on October 14, 2012

Look up John A Davis, who specializes in this. His book, Generation to Generation, is on this subject. He's my former boss and consults on this topic.
posted by xingcat at 1:31 PM on October 14, 2012 [1 favorite]