According to the Family Firm Institute, it is risky for family business owners to assume that the ownership and direction of a successful family business will remain stable. As the company grows, so does the possibility of shareholder disagreements.
Without policies, anyone who owns shares in your family business can sell them to anyone, including non-family members, at any time.
shareholder can also vote to elect new members to your company's board of directors.
Similarly, as your shareholder pool expands, the majority of your shareholders will end up with a smaller percentage of your company's shares, resulting in lower dividends (if the company is paying dividends).
According to Deloitte's article 'Shareholder Agreement in Family Companies,' an effective shareholding strategy or shareholder agreement should include the following provisions:
Who are the stockholders, and how are the shares distributed?
Board of directors quorum for the shareholder meeting
The right to vote
Transfer of stock
Shares are being sold.
Policy on dividends
The mechanism for resolving disputes