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FAMILY BUSINESS SERIES: The Secret to Avoiding Conflict

In any business with more than one owner, there is a strong possibility that over the life of the business the owners will have conflict. That conflict could hurt the business.

And when the business is owned by family, the damage that any conflict can do becomes doubled - - jeopardizing the business and the family.

It is critical then, particularly for a family owned business, to avoid conflict between the owners.

So here is the secret to avoiding conflict - - assume that there will be conflict. When business owners assume that there will eventually be conflict between them they are motivated to take the necessary steps to avoid it.

The endpoint of those necessary steps should be a written agreement between the owners – be it corporate by-laws, operating agreement, or shareholders agreement. That document will establish the process for handling conflict with a pre-set solution for each eventuality.

The written agreement should have both triggering events and resolutions for each conflict event. Those resolutions could range from mediation, suspension from work, forced buy-out or even dissolution of the company.

The important thing is that the entire family knows and agrees on the process and the consequences for conflict. In many instances, simply have that conflict management process in place enough to avoid conflict in the first place. And that is the secret to avoiding conflict in a family business.

For more information on this or other legal issues facing your business and how to navigate or litigate through them please contact Judith Bachman, Esq. at or 845-639-3210.


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