Family businesses : choice of corporate vehicle

Abstract

This thesis is intended to examine the Maltese Legal Framework in relation to family business. Family enterprises form a big part of our economic society and when it comes to information on this particular sector, it is still limited and obscure. Although my work is still very limited, I sought to gather information from various options that are available on the island for the family business to adopt. The chapter introducing the thesis focuses on the international scenario, reflecting the major brands that started from a small family sized business to become leading organizations across borders. Chapter two gives a more detailed explanation of the definition of family business and the special features that distinguishes it from any other arrangement. Also discussed are the difficulties that family members encounter when trying to separate the two: family and business. Chapter three is the fulcrum of my thesis in the sense that it captures several aspects that family businesses take into consideration when choosing which structure is the most suitable for their organisation. Chapter four which lists trusts as an option for businesses. Although listing several options, there is not a 'best choice' of corporate vehicle, but some, more than others, accommodate the family business' needs better. Chapter five discusses the necessary tool of Corporate Governance, which makes a family structure more efficient. Corporate Governance Framework applied in public listed companies should also be adopted by private entities. In the concluding chapter, Chapter six, mentions a number of legal frameworks to facilitate family businesses.