Continuity Planning for the Family Owned Business

The overriding objective when undertaking succession planning for the family business is ensuring a smooth transition of wealth to the next generation while maintaining harmony and ensuring that the business survives unscathed.

​In a non-planned situation, a family-owned business can easily fall into a survival trap.

​To grow a family’s wealth and pass it on to the following generation for their stewardship can often mean that the next generation must be given the opportunity to take risks and pursue new directions for growth. In this context, the possibility ofdiversifying assets through a sale or strategic alliance should be considered.

​A successful intergenerational transfer of wealth may or may not involve the transfer of an operating business to the next generation. The family should also take into account not just financial capital, but also:

  • human capital – the individuals who make up the family including each member’s ability to find meaningful work;
  • intellectual capital – the knowledge gained through the experiences of each family member and the ability to share what they know;
  • and social capital – the family members’ relationships with each other.

What can go wrong?

​Studies have shown that the main causes of wealth transfer failures are:

  • breakdown of trust and communication within the family;
  • failure to prepare heirs for responsibilities;
  • other causes, such as a lack of a family mission and vision as well as errors in or lack of proper accounting, legal or financial advisory planning.

​The best chance for a successful continuity plan is to have your advisors work together over time to address the issues.

​But at the bottom of it all, business continuity planning requires the setting of clear objectives, agreement, good communication, recognition of risks and timely action.

​Proper governance in your organizational structure will help the group make decisions. The governance of a family business is more complicated than that of anordinary company because of the central role of the family that owns and leads the business.

Ongoing planning

​As the business matures, wealth management becomes a more pressing issue than during the initial wealth-creation phase of the business. The family must decide if they wish to remain connected through management of their wealth or to pursue their own separate destinies. Typically, some will wish to stay in the business, others will want to pursue their own interests.

​Continuity planning for family-owned businesses usually brings together professionals from diverse disciplines, including your lawyer, accountant and possibly financial planner.

The Family Office

​A family office may be useful in this process. In an appropriate situation it can provide: 

  • family meeting co-ordination; 
  • development and maintenance of governance structures;
  • conflict prevention and conflict resolution;
  • tax, estate and financial planning;
  • wealth transfer planning;
  • asset protection and risk management;
  • investment consulting, monitoring and performance measurement;
  • financial recordkeeping, compliance and consolidated reporting.

​For families with a strategic approach to wealth management, a family office can perform an important function for the maintenance of their long-term wealth across generations.

© The foregoing provides only an overview and does not constitute legal advice. You are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained in the context of your own particular circumstances.

Brigitte DioGuardi

B.A., LL.B

Brigitte obtained her Law Degree from the University of Sheffield in the United Kingdom. Upon her return, she qualified for the Bar and was called to the Law Society of Ontario (formerly the Law Society of Upper Canada) in 2002. She was also a member of the Bar of British Columbia and headed up the Vancouver office of DioGuardi Tax Law.  Fluently bilingual in English and French, Brigitte has broad experience in the areas of:

  • Tax Law, Civil Assessment Negotiation and Litigation, Criminal Prosecution Defense, Unpayable Tax Debt Solutions, Audits, Tax Amnesty.
  • Corporate and Commercial Law
  • Real Estate
  • Wills and Estates
  • Insolvency and Bankruptcy

Tax Law

​If you are one of thousands of Canadians who have failed to file taxes for several years the answer maybe to seek amnesty. Be aware that failure to file for more than one year if you owe taxes is a criminal offence and you may be criminally prosecuted.

The CRA Voluntary Disclosure Program allows taxpayers to come forward and obtain immunity from prosecution and most civil penalties, provided certain conditions are met.

We specialize in lawyer-negotiated tax debt settlements and tax amnesties with federal and provincial tax authorities, offering taxpayers a much-needed resource for the resolution of situations that all too often put personal and financial lives at risk. We stand as your protector, defender, and advocate to ensure that you the taxpayer, receive the best treatment possible. 

We offer solutions for tax problems such as:

  • Unreported income
  • Unfiled tax returns
  • Payment arrangements
  • Unpayable tax debt
  • Tax dispute litigation
  • Criminal tax defense

Wills, Estates & Trusts

​We offer the following will, estate and trust services for individuals and business-owners:

  • Wills
  • Preparation of trust agreements
  • Powers of attorney
  • Estate administration
  • Probate
  • Representation in estate driven litigation
  • We currently offer a special time limited package for one will and two powers of attorney (property and personal care) for $295 plus HST

Real Estate

We can assist you with all your real estate needs including:

  • Drafting agreements
  • Purchases and Sales
  • Title transfers
  • Leases

Tax Debt Relief

With the coronavirus pandemic leaving many in a precarious and dire financial situation, it is essential that you protect yourself financially. If you have a large, unpayable tax bill, we can help. We act in the best interest of the tax debtor. Unlike us, insolvency trustees represent not only you but your creditors (ie- the tax collector). The more tax you pay, the more trustees earn. Our goal through leveraged negotiations, is to reduce your tax debt.

Please consult our blog post Protecting Your Assets from Creditors for more information.

Business & Tax Planning

If you do not already have a certified financial planner, we can provide one or more highly qualified people who can work closely with us to assist you with such matters as:

  • Resident and non-resident corporate restructuring
  • Optimum use of holding corporations
  • Continuity and succession planning
  • Tax-free transfers
  • Losses and ABIL planning
  • Making interest tax deductible
  • Small business planning

Corporate & Commercial Law

We have represented business clients for the last 50 plus years and have supported their legal requirements on an on-going basis by offering the following services:

  • Incorporations and corporate governance
  • Corporate reorganizations and transactions for the directors and shareholders
  • Negotiation and drafting of agreements, professional corporations, minute book maintenance

Brigitte DioGuardi

B.A., LL.B

Brigitte obtained her Law Degree from the University of Sheffield in the United Kingdom. Upon her return, she qualified for the Bar and was called to the Law Society of Ontario (formerly the Law Society of Upper Canada) in 2002. She was also a member of the Bar of British Columbia and headed up the Vancouver office of DioGuardi Tax Law.  Fluently bilingual in English and French, Brigitte has broad experience in the areas of:

  • Tax Law, Civil Assessment Negotiation and Litigation, Criminal Prosecution Defense, Unpayable Tax Debt Solutions, Audits, Tax Amnesty.
  • Corporate and Commercial Law
  • Real Estate
  • Wills and Estates
  • Insolvency and Bankruptcy

Joyce Bruno

EXECUTIVE LEGAL ASSISTANT

Joyce Bruno has worked as executive legal assistant to Paul Dioguardi for 35 years and continues to offer her expertise and experience to the Dioguardi Law firm. Joyce’s role has evolved over the years and has acquired and developed many skills. She is an invaluable asset in case management and ensures the smooth running of our office.

Paul DioGuardi

B.A., LL.B, Queen’s Counsel

Paul obtained his Law Degree from Queen’s University in 1964.  He is a member of the Bars of Ontario, British Columbia and the Turks and Caicos Islands, a British tax free territory in the West Indies. He has over 50 years of experience and was trained at the Ottawa head offices of Revenue Canada and the Tax Litigation Section at the Department of Justice. Paul has had and continues with an extensive career in various areas of law such as:

  • Tax Law, Civil Assessment Negotiation and Litigation, Criminal Prosecution Defense, Unpayable Tax Debt Solutions, Audits, Tax Amnesty.
  • Corporate and Commercial Law
  • Real Estate
  • Wills and Estates
  • Insolvency and Bankruptcy