All the issues related to the Family Protocol are very topical, as there are always companies with partners from the same family. Before delving into the various aspects of the Family Protocol, it is essential to define what exactly it is. In simple terms, we can define the Family Protocol as a framework agreement signed by the partners within a company composed of members of the same family with the purpose of establishing the rules of the game that facilitate decision making, preserve family relationships and ensure the proper development of the company.
According to the study "Las empresas familiares ante el reto de la innovación" (Cruz & Santaló, 2022)[1], carried out by the Instituto de Empresa, approximately 89% of private companies in Spain are family businesses. Despite their significant contribution to the economy, there is no specific law regulating the particularities of these companies. For this reason, it is essential that the partners themselves are responsible for anticipating conflicts and ensuring the smooth running of the company.
This objective can be achieved through the drafting of the Family Protocol, which can address a wide range of issues, among which the following stand out:
- Establish a mission, principles and values that unify objectives and foster collaboration among members.
- Define the election process and composition of the company's governing bodies, establishing majorities for important decisions. Occasionally, additional control bodies not provided for in the legislation, such as the family council, may be created.
- Define criteria for the inclusion of family members interested in working in the society.
- Implement preventive measures to address situations of blockage and disagreement, promoting understanding among family members.
- Establish rules for the transfer of shares or participations, determining when and to whom they can be transferred, in order to protect the company from the entry of new shareholders outside the family.
- To contemplate the right of separation, specifying both the causes and the procedure to carry out the division of the company when the time comes.
These are examples of elements that can be included in a Family Protocol, although the possibilities are almost unlimited. The creation of a Family Protocol requires a careful analysis of the company itself, the business, the environment, the family and the main relationships and/or aspects to be regulated, as well as a review of the applicable legislation and jurisprudence.
The protocol only binds the signatories of the document. Therefore, situations may arise in which, despite having a signed Family Protocol, some aspects are not fully applicable due to lack of effectiveness against non-signatory third parties, hence the importance of establishing sufficient legal mechanisms to ensure this effectiveness.
As can be seen, the protocol makes it possible to foresee and address future situations and problems, avoiding conflicts that could leave a significant economic and emotional footprint. The elaboration of a Family Protocol is a complex matter that has a significant impact on the future of society. For this reason, it is essential to seek appropriate advice from experienced professionals in the field. In BUSQUETS, we are at your disposal to offer you the necessary orientation. Do not hesitate to contact us if you wish to deepen in this subject, we will be pleased to help you in everything you need.
[1] Cruz, C., & Santaló, J. (2022). Family businesses facing the challenge of innovation. Ernst & Young. Retrieved from https://static.ie.edu/fundacion/pdf/Informe_Empresa_Familiar_IE.pdf