1、Succession planning for family businessesDecember 2024Introduction2|PwC Succession planning for family businessesIn the circle of life,succession is certain and inevitable.It is a process that ensures continuity of the family legacy,empowers the next generation and strengthens family bonds,thus crea

2、ting a sense of belonging amongst the next generation.The process aims to achieve peace and harmony amongst the generations to come and parallelly ensures business growth without disruptions.Given the high importance of succession planning,the first step is to start well in advance the expected tran

3、sition.This allows time to address potential issues and ensures that the transition is smooth.Without a clear succession plan and roadmap,many business families with multiple members(sometimes across generations)face conflicts within the family primarily on account of factors such as lack of clarity

4、 on roles and responsibilities of members,want of decision-making power,and contribution in the business vis-vis the entitlement to remuneration.These factors can create feud within the family and potentially threaten the businesss survival.While 9 out of 10 publicly traded companies in India are fa

5、mily owned or controlled,only 63%of Indian family business leaders say they have formal governance structures in place,including shareholder agreements,family constitutions and protocols,and even wills.1Therefore,in order to overcome the above issues,a successful succession plan can be divided into

6、the following two parts:I.Succession of ownershipII.Succession of management1.https:/www.pwc.in/assets/pdfs/research-insights/creating-holistic-value-for-family-businesses-v1.pdf3|PwC Succession planning for family businessesI.Succession of ownershipSuccession of ownership in family businesses means