Aragon & Aragon (Guatemala Law Firm / Abogados en Guatemala)

The incidence of the familiar company in the development of the present economy is beyond all doubt. In agreement with the studies of company demography, the great majority of the companies of all the developed countries, in which the freedom of initiative has been respected, is familiar companies; at the same time, it is observed that the presence of familiar companies is more superior in the advanced countries and than before they reached an elevated level of development.

The problem of the familiar companies is not as much in its birth, as in its development and continuity. Thus, the analysis of the 1,000 greater companies of Spain in 1972, 1982 and 1992 is put of example, makes see that the percentage of familiar companies has diminished remarkably, happening to be 40% in 1972, to 23% in 1992, after surpassing the minimum of 17% in 1989.

The great majority of the causes of this spectacular reduction is related to the generational changes, then, according to the few statistics available on both points, of each 100 familiar companies that approach second generation, only 30 survive and, of these only 15 continue active in third generation.

In too many occasions, the succession in the familiar company undergoes serious delays in the time. The succession process is an emotional process and, often, not as rational as he would be desirable, reason why it turns out more comfortable to deny his necessity that to confront it. Other times, the causes of the delay in the succession are in which the predecessor and the rest of the organization do not know how to structure the problem of the succession and, when not being decided to dedicate time, or money, they do not know how to plan it and to implant the suitable solution. Also, it can happen that the predecessor does not want to be happened and, consequently, one is against directly and clearly to develop the process.

Appointment of example, that in national regulations, authorizes to the testator to attribute and to designate, by way of the inheritance, the familiar company to a single heir, if he is this one the only suitable candidate for the succession of the business and whenever the legitimacy of its heirs is not harmed.

For it, Aragón & Aragón recommend the following thing:

1. TESTAMENTARY PLANIFICATION OF THE SUCCESSION PROCESS

With previous character to the analysis of the different alternatives from forecast “mortis cause " of the succession process of the familiar company, we must expose that the possible consequence of the lack of forecast of this succession, as much in the assumption that the industrialist passes away without to have granted testament, as in the case that, being it even granted, has not been had specifically the company like “unit”, is the difficulty in the continuity and conservation of the company, every time the hereditary community that arises normally in such assumptions can impede the movement of the business when the heirs do not share aims for the familiar company such. In consequence, it can affirm that a meditated testament can solve the problems of conservation of the company, although not of continuity, that will depend in any case on the will of the beneficiaries of this awarding.

2. ALIVE PLANNING “INTER” OF THE SUCCESSION PROCESS

It is recommendable that the industrialist while still alive begins the succession process, constituting previously one society to which the business is contributed, or by means of donations or transactions in favor of its children or family. In the assumption to decide on the donation, in as much as soon as this one it could imply the change of ownership of the company, the donor will have to observe certain cautions in altars to avoid the revocation of the donation, in damage of the company idea, prohibiting specifically to the donataries that while still alive make of the donor any act or legal business of disposition or burden on the company like unit, or reserving to the donor the faculty to arrange, for a reason or purpose onerous, of the company like unit, for which it would be authorized in agreement arranges the effective legislation. If the industrialist decided on the transaction of the company like unitary object, will be able to settle down the pacts that he has by advisable, whenever they are not opposite to the laws, to the moral, nor to the public order, among them, to the object of guarding by the continuity and conservation of the familiar company, avoiding the irreversibilidad of the produced change of ownership of the same one after the transaction.

3. PLANNING THE CORPORATE - BUSINESS OF THE SUCCESSION PROCESS

It is doubtless that the familiar companies of small or medium volume finds better arrangement in the limited liability companies that in the anonymous ones, but the previous affirmation can be seen affected by the circumstance that an increase of volume, their internationalization and the search of other people's resources of financing derive to the familiar companies towards the joint-stock company. However, he would be advisable to correct the existing discordances between the legislation and the demands of the familiar company, approaching an ample process of legislative modification.

4. THE FAMILIAR PROTOCOL

Finally, the existence of a Familiar Protocol will allow strategically to plan the generational change with the sufficient advance, looking for the consensus in the scope of the family and the own enterprise scope. The Familiar Protocol will facilitate the necessary separation of the patrimonies and the familiar criteria of the purely enterprise ones and, really, the participation of the following generation in the tasks that until then the founder developed.

Really, the Familiar Protocol will be a process, an agreement frame that will need to be developed by other documents, like the testament of the industralist, its antenuptial agreements of settlement and those of its children and the social statutes of the society.