Family Enterprise Advisory
Most family businesses do not fail on strategy. They fail on the conversations nobody scheduled — who leads next, what fair means, and what happens when a shareholder wants out.
What this covers
Family enterprise advisory is the work of aligning three overlapping systems — the family, the ownership group, and the business — so that a decision made in one does not quietly damage the other two. It combines governance design, succession readiness, and tax structuring, because in a family-owned company those three questions are never actually separate.
Who this is for
- Second- and third-generation owners deciding how the next transition will work
- Founders whose children are in the business, are about to be, or have chosen not to be
- Sibling and cousin ownership groups who need a shareholders' agreement that anticipates disagreement
- Families whose operating company, real estate, and investments have grown into a structure nobody fully maps any more
What you end up with
The point of the exercise
Decisions with a known owner
Every recurring decision — pay, dividends, hiring family, buying someone out — has a named forum and a written method.
A structure that anticipates change
Share classes, trusts, and agreements that hold up through a death, a divorce, a departure, or a sale, rather than needing an emergency rebuild.
Conversations that happen on purpose
The difficult subjects get raised in a meeting with an agenda, not at a dinner table with no exit.
Family Enterprise Advisory in detail
Three circles, one decision at a time
Family, owners and business are three overlapping circles, and every person involved sits somewhere on that diagram. Most disputes we are called into are circle problems: a salary argued as a fairness question, a dividend policy argued as a parenting question. Naming the circle a decision belongs to does not settle it, but it stops the wrong people being asked to make it.
Governance proportionate to the family
Two shareholders need to know, in writing, what happens on death, divorce or a buyout. Eleven cousins across two branches need a shareholders' agreement with a valuation mechanism, a dividend policy set annually, and a forum other than a holiday dinner. We build the smallest structure that answers the questions in front of you, then set a review rhythm so it grows with the family.
Where the tax rules meet the family
The tax on split income rules mean paying a family member is no longer a matter of preference: dividends to a spouse or adult child are taxed at the top rate unless an exclusion applies, most often hours actually worked or a real shareholding. Those tests reward structures built before the money moves, and documentation kept as it does.
Succession planning for a family enterprise
Succession is three transfers, of management, ownership and control, often on different dates and to different people. We plan backwards from the handover: who leads next and what fair means for the others five years out; the ownership structure, usually a freeze with a trust, three to five years out; management handed over in stages. The work is led by a Family Enterprise Advisor (FEA).
How it runs
What working together looks like
Understand the enterprise as it is
We map the current corporate structure, share ownership, and who occupies which circle — including the people whose influence is real but undocumented.
Separate the questions
Family questions, ownership questions, and business questions get sorted apart, so each one goes to the group that can actually decide it.
Design governance and structure together
Shareholders' agreement, dividend and compensation policy, and the corporate and trust structure are drafted as one set of decisions, because a governance rule the tax structure cannot support is not a rule.
Implement with your other advisers
We work alongside your lawyer, valuator, and investment advisers so the documents, the share register, and the tax filings agree with each other.
Set a review rhythm
A structure built for today's family fits for about three to five years. We agree in advance when we look at it again, and what would trigger looking sooner.
Questions
Family Enterprise Advisory, answered
General information about how the rules work, current at the time of writing — not advice about your situation. Speak to Ray Loucks before acting on any of it.
What does the FEA designation mean?
FEA stands for Family Enterprise Advisor, a designation awarded by Family Enterprise Canada. It certifies training in the multi-disciplinary side of family business — governance, family dynamics, and the coordination of legal, tax, and financial advice — rather than in a single technical field. Ray Loucks holds the FEA alongside his CPA, CA, and TEP designations, which is why the tax work and the family work are handled in the same conversation instead of being passed between two firms.
How is this different from ordinary business consulting?
A general consultant optimises the business. Family enterprise advisory accepts that the business is one of three systems and that optimising it alone can be the wrong answer — a restructuring that maximises after-tax proceeds but splits two branches of a family is a failure, not a win. The scope includes the ownership group and the family, and the recommendations are tested against all three.
Do we need a family council if there are only three of us?
Almost certainly not. Three shareholders need a current shareholders' agreement, a documented method for valuing shares, and clarity on what happens on death, disability, divorce, or departure. Formal councils and family constitutions start to earn their cost once ownership spreads across branches or generations and the shareholders are no longer all in the room every week.
Can paying family members from the business create a tax problem?
Yes. Under the tax on split income rules, dividends and certain other amounts paid to a spouse, child, or other related person can be taxed at the top marginal rate unless an exclusion applies. Salary is tested differently — it must be reasonable for the work actually performed. In both cases, the structure and the documentation need to exist before the payments are made, which is why compensation is a structuring question rather than a year-end question.
How far ahead should a family start succession planning?
Five years before the intended handover is comfortable; ten is better where a trust or an estate freeze is involved, because the tax structure works best when it has time to accrue growth in the next generation's hands. Starting late is still worth doing. What becomes expensive is starting after a death, a divorce or a falling-out has already fixed the terms.
What if none of our children want the business?
Then the plan changes shape rather than stopping. Options include a sale to management, a third-party sale, or an employee ownership trust. Each has a different tax profile and a different timeline — a management buyout usually needs several years of preparation and financing groundwork, so the earlier the family reaches an honest answer, the more options remain open.
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