23/06/2026
Many South African family businesses that have been built over decades still rely on succession arrangements that were put in place years, and sometimes decades, ago. While the business itself has evolved, the structures governing ownership, control, and succession have often remained unchanged.
Problems can arise when ownership needs to pass to the next generation. Shareholding structures may no longer reflect the family's intentions, shareholder agreements may not adequately deal with retirement, incapacity, death, or the exit of a family member, and estate and trust planning arrangements may no longer align with current tax and regulatory requirements.
These issues are often overlooked while the founder remains actively involved in the business. They tend to come to the forefront only when a transition becomes necessary, at which point resolving them can be considerably more difficult and costly.
The consequences can be significant. Disputes between family members, uncertainty regarding control of the business, unintended tax liabilities, and delays in implementing succession plans can all place unnecessary strain on both the business and the family.
Succession planning should not be regarded as a once-off exercise. Periodic reviews help ensure that ownership arrangements remain appropriate, shareholder agreements remain effective, and the business is positioned for a smooth transition when the time comes.
For many family businesses, reviewing existing succession arrangements today can help avoid costly disputes and unnecessary complications in the future.