How much control should you have over your firm?

AS a firm's ownership structure affects the incentives, behaviour and, ultimately, the performance of family members, managers and other stakeholders in the firm, it is therefore essential to get the formula right. Designing a sound ownership structure will resolve the allocation of voting rights, the transferability of ownership rights and set out how profits and losses are shared. It is the most effective way to minimise the impact of roadblocks in a family business. When designing an ownership structure it's most important to keep the arrangement flexible, so changes can be made over time as the family and business grows.

It may sound simple, but there are four challenges to bear in mind when looking at your ownership design.

Retaining control while growing