Referring to my previous article about the family business, and given the importance of the issue and the size of the issues of disputes between the heirs after their entry as partners in the companies that devolve to them by inheritance, and the conflict that arises over management, which results in the disruption of the company’s workflow, Therefore, I saw writing again on the same subject, given that the last Saudi Companies Law issued by the royal decree issued in (1437 AH) did not include solutions for offices or institutions whose founder practices work and then dies to the mercy of God. Where the largest number of these establishments are liquidated due to the difference of heirs over who benefits from the registry due to differences between them, This leads to wasting the experiences gained by the establishment and its commercial reputation. The guiding charter for family businesses issued by the Ministry of Commerce did not succeed in alleviating the differences that erupt between children upon the death of the testator. As well as the intervention of partners in management, The charter included some general rules such as regulating the work of family members in the executive body, and a statement of the dividend policy, Drawing up the mechanisms for the shareholder’s disposal of shares and abroad, His goals were ambitious to establish a balance between the interests of family members and the interests of the company, and the quality of family members with their rights and obligations. regulating the value of the company, developing its business, and making the company a permanent contribution base for the family in the service of the national economy, Encouraging the independence of the company’s institutions and its executive team from the family, Transparency and clarity in the relationships of family members.
But on the ground, there is no echo of that charter in practical implementation. Where the companies’ system and the instructions of the Ministry of Commerce were empty of any solutions that would solve the problems in society, This has led to a shortening of the average lifespan of family businesses in the Kingdom. which some studies estimated to be less than 30 years old, Others estimated it at 40 years. While there are companies in Japan and Europe that have been established for hundreds of years
Therefore, the solution may be to form a committee from the Ministry of Commerce and Chambers of Commerce to be resorted to by any of the heirs, among whom there is a dispute over the continuation of the facility or the partners in the family business. to reconcile them to ensure that the efforts of the founding benefactor are benefited from the continuation of the establishment, among those who appreciate and desire its continuation, Persuading the opponents of amicable settlements among themselves, This is on the one hand, and on the other hand, the drafting of a family pact, which is a painful letter, or a constitution that is accepted by family members, They refer to it to achieve the purpose of continuing the work of the establishments between the second generation and what is on it.
It is assumed that this charter is based on a set of legal and legal rules and regulations that control the actions of family members. It prevents them from giving priority to personal interest over the interest of the company
And by research, it was found that the problems of family businesses start from the second generation. and then exacerbated in the third generation, And you can’t reach the fourth generation in most cases.
Because the second generation may find among its members someone who takes advantage of the lack of the gene to demand everything and abuse in the face of his other partners, and seeks to possess everything, And because there is no system that restrains him or limits his ambitions, Therefore, disputes arise and the matter goes to court. Especially in family businesses where there are more brothers or half-brothers, And sometimes by virtue of inheritance or partnership between the founders and cousins, Therefore, the rift of differences increases, widens and ramifies from brother to sister. Then cousins, To another complex and intertwined family forms. |
Therefore, I suggest that the Ministry of Commerce discuss with the Chambers of Commerce to find solutions to the problems of family businesses and not only issue a charter, Because family businesses constitute more than 80% of business and financial companies, It also has a significant impact on the national economy
Extremely.
Therefore, the hope rests on the inadmissibility of changing the family company, especially if there are among the family members who wish to continue it. To provide support to family businesses, In terms of administration, administrative organization, and so on.
