According to a study by the Institute for SME Research (Institut für Mittelstandsforschung) in Bonn, approximately 95% of companies based in Germany are family-owned. They generate around 42% of all turnover and account for more than half of all jobs liable for social security contributions in Germany.
A typical characteristic of family businesses is unity of ownership and management. The unique feature of a family business, namely that the managing directors are majority or even sole shareholders leads, on the one hand, to stable corporate management and a tendency towards long-term business planning. On the other hand, opportunities to provide the company as a whole with modern management structures are sometimes missed.
When the number of shareholders grows substantially due to inheritance or anticipated inheritance, if not before, restructuring of the company in relation to business management and company law should be considered as a matter of urgency. The Governance Code for Family Businesses, the fourth edition of which was published in May 2021, can be used as a guideline. This Code has been created not only by respected academics, but also representatives of large family businesses.
The prime objective must always be to reconcile the needs of the family and the company, to secure the profitability of the business in the long term and to preserve it as a reliable source of income for the whole family.