After I returned to the UAE within the late Nineteen Nineties after 4 years in France, I joined my father and brother in our household enterprise. On the time, I used to be confronted with a variety of challenges associated to one thing that almost all enterprise faculties within the Nineteen Nineties had not ready us for: succession planning in household companies.
I signed up for a sequence of household enterprise conferences in Dubai, and luckily I used to be capable of be taught from a few of the most skilled enterprise households within the area, together with WJ Towell in Oman, the Sultan Group and Bader Group in Kuwait, Al Muhaideb and the Kanoo Group, each of which cowl all the Gulf, together with Al Shirawi in Bahrain and Al Fahim within the UAE. A recurring subject was the challenges that many household companies within the area face when a founder dies.
In recent times, the UAE has acknowledged the significance of household companies within the financial system. This isn’t an summary matter. In line with a report from the UAE Ministry of Economic system, 70 p.c of the non-public sector workforce is employed by family-owned companies, which additionally account for 90 p.c of all non-public companies within the nation.
But their significance is not any assure of their longevity. For instance, a Harvard Enterprise Assessment examine estimates that “about 70 p.c of household companies fail or are offered earlier than the second technology has an opportunity to take over.”
The Gulf states, particularly the UAE, usually are not proof against such challenges. Over the previous thirty years, a variety of households within the UAE and the Gulf area have been challenged by or succumbed to the disputes that come up after the demise of a founder. Even in the present day, many within the UAE are eagerly awaiting the end result of a transition at one of many nation’s main family-owned companies.
Whereas extra must be performed, constructive steps are being taken within the nation, together with the institution of the Dubai Middle for Household Companies underneath the umbrella of the Dubai Chamber and the DIFC Household Wealth Centre. In 2015, my circle of relatives endowed the Sheikh Saud Bin Khalid Al Qassemi Chair in Household Enterprise on the American College of Sharjah, which is now held by Professor Rodrigo Basco. The category has confirmed so common that a number of programs at the moment are provided every semester.
However succession planning does not simply apply to massive corporations. Every of us is answerable for guaranteeing that our family members, whether or not or not they’re related to a household enterprise, could be knowledgeable of our property and liabilities and the ultimate needs we want to see fulfilled.
In my opinion, I wrote the primary will in Could 2011, and since then I’ve revisited and up to date the textual content twice. As priorities shifted and new causes emerged, I needed to preserve adjusting. In my very own will I checklist what property I’ve and who I owe cash to (in a single case it’s a pal who lent me R700 in 1997 and has refused to pay it again ever since). I additionally point out which charities I want to donate cash to and what occurs to the big artwork assortment that I at the moment handle.
The explanation for updating wills was made clear to me when my very own father handed away in 2005. Though he had left a handwritten will, it was neither notarized nor witnessed. We then found {that a} will had been written a number of years earlier and a few changes had been made.
As soon as once more, there are some constructive developments on this space within the UAE, such because the institution of the Dubai Courts Public Notary, the place expats’ wills could be notarized, or the DIFC Wills Service Centre. On this case, as with household companies, the legal guidelines might be streamlined and permit property to be allotted at will, no matter gender and nationality, for many who want.
Islam provides its followers the appropriate to resolve the allocation of as much as one-third of an individual’s property after they’ve been handed on, whereas the remaining two-thirds should be allotted based on Sharia (Islamic regulation).
Planning the succession of a big household enterprise or writing a will for a person usually are not simple or fast processes. They will final a number of hours or weeks of your time. However they’ll spare family members a lifetime of uncertainty.
Up to date: September 22, 2023, 6:00 PM
