Service
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
The standard model for a family enterprise puts the family, the owners, and the business in three overlapping circles. Every person involved sits somewhere on that diagram, and where they sit determines what they can reasonably expect. A daughter who works in the business, holds shares, and comes to Sunday dinner occupies all three circles at once — and she is entitled to a different thing in each.
Almost every dispute we are called into turns out to be a circle problem. A salary decision gets argued as a fairness question. A dividend policy gets argued as a parenting question. Naming the circle a decision belongs to does not settle the decision, but it stops the wrong people from being asked to make it.
Governance that is proportionate to the family
A family with two shareholders does not need a formal family council. It does need to know, in writing, what happens if one of them dies, divorces, or wants to be bought out. A family with eleven adult shareholders across two branches needs considerably more: a shareholders' agreement with a valuation mechanism, a dividend policy that is set annually rather than negotiated case by case, and a forum where ownership matters get discussed somewhere other than a holiday dinner.
We build the smallest structure that answers the questions actually in front of you, then set a review cadence so it grows with the family rather than being rewritten in a crisis.
Where the tax rules meet the family dynamics
The tax on split income (TOSI) rules mean that paying a family member from the business is no longer a matter of preference. Dividends to a spouse or adult child can be taxed at the top marginal rate unless a specific exclusion applies — most commonly the excluded business test, which turns on averaging twenty hours a week in the business, or the excluded shares test, which turns on holding at least ten percent of votes and value in a corporation that is not a professional corporation and earns less than ten percent of its income from services.
Those tests reward structures built before the money moves, not after. A share reorganization that gives an adult child direct shares instead of a discretionary trust interest can change the answer entirely. So can documenting the hours a family member actually works. We look at the compensation you intend to pay and tell you what structure supports it.
Legislation and dollar thresholds change. Everything on this page is general information about how the rules work, not advice about your situation.
Preparing the next generation, or accepting that they are not coming
Succession readiness is not the same as a succession plan. A plan names a date and a successor. Readiness asks whether that successor has run a bad year yet, whether the management team will follow them, and whether the founder can actually stop making decisions.
Sometimes the honest answer is that no family member wants the business. That is a legitimate outcome, and it is far better discovered five years before a sale than five weeks into one. Where that is the conclusion, the work shifts to positioning the company for a third-party sale or an employee ownership structure, and to what the family will hold and do afterwards.
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.
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.
Often needed together