The death of Principal Owner/CEO is cited as the largest single reason for failure of over 70% of the family businesses which failed following the death of principal owner. Lack of capital was primarily caused by estate tax obligations or the need to provide retirement funds to a surviving spouse. It is vital for founders to recognise and provide for this risk if tragedy is to be avoided.
This post is based on an article entitled “NEXT GENERATION DISPUTES IN THE FAMILY BUSINESS” by Morton A. Harris.
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