Family business

When family is involved in business together, conflicts can arise that are much more emotionally tense and difficult to resolve than those in a purely professional environment. Understanding this, we have devised this guide to try and help you to avoid conflict by preemptive planning, resolve issues that do arise in the most objective and professional manner possible, and make the most out of unfavourable situations that cannot be avoided.

More so than in any other business, it is important for the owner/ operators of family businesses to maintain professionalism and objectivity, to help keep the emotional aspect of personal relationships from interfering in the running of the business. An excellent way to ensure that management remains as unbiased as possible is to have a clearly defined infrastructure to rely upon, particularly as regards business plans, financial plans and management hierarchy.

In the following pages, we will touch on the most common problems that can arise within family business, and provide you with the tools to work through and resolve these issues and prevent them from happening in the future.

A person who is insolvent must decide on a course of action that is acceptable to their creditors. Due to the personal nature of bankruptcy and the social stigma associated with it, many people are loathe to seek appropriate advice. This is in spite of the intention of the Bankruptcy Act 1966 (the legislation) to rehabilitate the debtor to allow them to make a fresh start.
Bankruptcy

A redundancy occurs when the decision is made by an employer that a job their employee has been employed to carry out is no longer required. The employer’s decision must be based on circumstances that are not part of the ordinary turnover of labour.

Possible reasons why a position could be made redundant by an employer include:

  • technological changes that affect the business;
  • restructuring of the business;
  • an employer’s inability to pay their employees; and
  • the sale or purchase of a business where the new owners decide not to keep the previous employees.
    Information About Redundancy

This part of the Bankruptcy Act (1966) was introduced in December 1996. The purpose of the introduction of Part IX was to provide a means for consumer debtors to enter into an agreement with their creditors rather than enter bankruptcy.
Part IX Debt Agreements

The definition of insolvency found in the Corporations Act 2001 (s.95A(2)) is not particularly helpful, “A person who is not solvent is insolvent”. The issue of solvency then is the key to determine whether a person or entity is insolvent or not. To simply say that solvency exists when the person or entity is able to pay its creditors as and when their debts are due fails to take into consideration the normal circumstances and environment that business’s operate within.
What Is Insolvency