In the analysis\nentitled Barriers to family business in Slovakia, we focused on a detailed\nexamination of the problems that family businesses encounter in their\nentrepreneurial activities. The treated topic enjoys a high level of attention\nin the society, since also in our environment efforts to improve the conditions\nof family businesses have gradually started to be applied. These businesses are\nof great importance to the national economy and for this reason it makes sense\nto help them prosper.<\/p>\n\n\n\n
The primary\npurpose of the analysis was to identify the problems that most burden family\nbusinesses. A secondary objective was to summarise recommendations leading to\nthe mitigation of existing barriers. In addition to the theoretical background,\ninterviews with representatives of family businesses and experts providing\nadvisory services to family businesses were also used to achieve the objective.<\/p>\n\n\n\n
Part of the\ntreatment of this topic is a summary of practical as well as theoretical\nknowledge with a link between the current legislation in Slovakia and in\nneighbouring countries related to family business.<\/p>\n\n\n\n
The document is\ndivided into seven chapters, with the following central themes.<\/p>\n\n\n\n
A summary of\ndefinitions of the concept of family business and a comparison of the current state of application of the definition<\/strong>\nin neighbouring countries such as the Czech Republic, Poland, Hungary, Austria\nand, as a representative among countries with a long history of family\nbusinesses, Italy.<\/p>\n\n\n\n Since family\nties distinguish family businesses from conventional businesses, in the next\nchapter we discuss the\ninterrelationships and interactions of family members in FBs<\/strong>, as well as\nthe categorization of FBs.<\/p>\n\n\n\n Nowadays, the issue of generational change<\/strong> is a\nhighly topical topic, because now is the time when the founders of Slovak\nfamily businesses need to hand over their businesses to the next, incoming\ngeneration. <\/p>\n\n\n\n The\nhandover of the FB in terms of property succession<\/strong>\nis also dealt with in the analysis. We have been able to identify selected\noptions for the transfer of FB, together with pointing out the shortcomings and\nopportunities for inspiration in other jurisdictions regulating instruments for\nthe redistribution of company assets, which by their nature are more suitable\nfor FB.<\/p>\n\n\n\n Property\nsuccession is also related to the topic of the\nlegal conditions for inheritance<\/strong> of a family business. In the analysis, we\nalso present the possibilities of expressing the will of the founders of the FB\nin matters of redistribution of the assets of the family business.<\/p>\n\n\n\n In the next\nchapter, we have elaborated on the\nsupport programmes and initiatives developed in our country and abroad<\/strong>\ntargeting the FB.<\/p>\n\n\n\n The last chapter\nsummarizes the recommendations <\/strong>of\nfamily business experts.<\/strong> We have\nalso added some practical advice<\/strong>\nthat can help FBs prepare for and manage complex family business situations.\nThe chapter also contains summaries and proposals\nfor changes to existing legislation.<\/strong><\/p>\n\n\n\n As noted above,\nan important part of the analysis is the recommendations for family businesses.\nThe recommendations below have been formulated by experts providing advisory\nservices to family businesses.<\/p>\n\n\n\n In order to\nmaintain the continuity of the family business, it is essential to establish an\nappropriate<\/strong> family business management structure.<\/strong> It is important\nfor the FB to develop a strategy<\/strong> for\nthe family business, to set up sufficient control mechanisms, to keep the\nfamily members (owners, managing family members and inactive family members)\ncommunicating with each other, with the managers or with other stakeholders\ninvolved in the running of the FB.<\/p>\n\n\n\n Family\nbusinesses have the option of forming the so-called family council (family governance) <\/strong>or, in other words, formally\nconvened family meetings. These are meetings of the whole family, not just the\nactive members participating in the FB. Family meetings should be organised at\nleast once a year (but more frequent meetings are recommended). The result of\nthe family council should be an agreement on family goals and values, on the\ndevelopment of the company, on the distribution or security of the company’s\nassets and on the preparation of the succession and handing over of the company\nto the next generation.<\/p>\n\n\n\n It is also\nimportant to create substitutability in\nthe company<\/strong> if an unexpected event occurs (e.g. death, disability, etc.). A\n(general) power of attorney<\/strong> for\nanother responsible member of the family business will help preserve the\ncontinuity of the business.<\/p>\n\n\n\n Setting rules\nfor passive family members, what rights and entitlements they are entitled to,\nwhat share of voting rights they have. The size of their share of FB assets is\na necessity. The solution to this situation is to draw up the so-called family constitution<\/strong> or code of values,\ni.e. a document which, although not legally binding, is morally binding. The\ncontent of the written document in question is a set of principles and\nprocedures governing the management and business of family assets.<\/p>\n\n\n\n The topic of generational change<\/strong> in the family\nbusiness must be addressed in advance and planned\nfor in the long term.<\/strong> The process of handing over a business is indeed\ncomplicated, with many legal and property issues to be set up and settled. In\ngenerational change, it is necessary to plan not only for managerial but also\nfor property succession. Property succession involves the transfer of all or\npart of the property already during the lifetime of the founder of the FB, or\nit may involve the transfer of property in the form of an inheritance. Both\nforms of passing on property to heirs have their advantages and disadvantages.\nInheritance proceedings tailored to the needs of the family business are\nabsent. As mentioned above, the FBs would need to make the inheritance process\nmore flexible, as the current legislation imposes a number of restrictions and\nconditions on the parties to the inheritance proceedings.<\/p>\n\n\n\n If no successor\nis considered an external manager<\/strong>\nshould be sought to take on this role. Finding a suitable external manager is a\ndifficult and lengthy process. When selecting a suitable candidate, it is\nessential to take into account their previous experience, entrepreneurial\nmindset, attitude to the values of the family business, and many other factors.\nThe manager is also required to minimize the occurrence of risks and not to\ntake unnecessary risks if it is not necessary in order to be able to promote\nthe interests of the direction of the family business.<\/p>\n\n\n\n The situation\nregarding finding a suitable external manager can also be dealt with through consultancy companies.<\/strong> These\nconsultancy services can save businesses time, costs and minimise the risk of\nemploying an unsuitable candidate.<\/p>\n\n\n\n In the case of\nenterprises classified by size as medium-sized enterprises, the reallocation of\nassets requires the use of different instruments than in the case of small\nenterprises. Consolidating assets into a single coherent family holding<\/strong> can usefully prevent some family problems from\narising. The family holding fulfils the function of ensuring the protection of\nproperty. The advantages of the holding structure are mainly: the capital link;\nthe possibility to influence the behaviour of other companies belonging to the\nholding; the possibility to implement restructuring plans by means of capital\nredistribution; the possibility to spread the business risk, e.g. by setting up\nsubsidiaries for risky projects; the possibility of better access to financial\nresources in the form of credit resources or additional capital injections.<\/p>\n\n\n\n The following\nrecommendations have been formulated for economic policy makers in the area of\nfamily business.<\/p>\n\n\n\n Since there is\nno legal definition of family business\nor family entrepreneurship <\/strong>in our legal system, it would be advisable to\ncreate a definition of the concept of FB that would be universally valid and\nwidely accepted. With regard to EU support activities, it is foreseen that with\nthe definition of the concept and subsequent embodiment in the legislation of\nindividual EU Member States, support services leading to financial and\nnon-financial support for FB can be provided.<\/p>\n\n\n\n In the context\nof family business, it would also be\nadvisable to modify some of the laws that have a direct impact on FB.<\/strong> The\nlegislation on inheritance in the Civil Code has not undergone any changes for\na long time, and the development requires certain amendments. A suitable\ninspiration may be the Czech law on trusts or trust funds, which has its roots\nin the Anglo-American legal system. Also, testamentary succession is very\nrestrictive for the person expressing his\/her last will.<\/p>\n\n\n\n Adaptation of\nconditions to family businesses also requires a transfer from a trade to a\nlimited liability company, as this transfer leads to an increase in costs,\nwhile the founder of the FB continues the same activity, but in a different\nlegal form.<\/p>\n\n\n\n Since the assets in the\nFB tend to be formally assigned to different family members, or the assets\nthemselves are not divided into family and business assets, a complication may\ntherefore arise from the divorce of the spouses. Also, the possibility of\ndissolving the joint ownership of husband and wife when starting a business\nrequires a change to the obligation to dissolve the joint ownership of husband and\nwife when starting a business, as in the event of doing business in the form of\ntrade the property of the other spouse, who is not in business, is also at\nrisk, and the entire family property is at risk at the same time.<\/p>\n","protected":false},"excerpt":{"rendered":" In the analysis entitled Barriers to family business in Slovakia, we focused on a detailed examination of the problems that family businesses encounter in their entrepreneurial activities. The treated topic enjoys a high level of attention in the society, since also in our environment efforts to improve the conditions of family businesses have gradually started […]<\/p>\n","protected":false},"author":2,"featured_media":1400,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","cybocfi_hide_featured_image":"","footnotes":""},"categories":[39],"tags":[],"class_list":{"0":"post-5851","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"\n