Family Firms and Family Constitutions: A Legal Primer

Abstract

‘Family firms are fashionable’ – this is the Economist’s snappy analysis of a new international trend. The article goes on to tell that more and more family companies are drawing up formal family constitutions. This movement is also gradually beginning to spread in Germany. To date, academic treatment has largely come from the field of management science. Studies of the corporate law aspects of this novel instrument are still rare. However, international law firms have now discovered the family constitution for themselves, and praise its virtues both in providing guidance and creating consensus.

This paper seeks to provide a corporate law analysis of family constitutions. It looks first at the governance framework for family firms (2) before exploring the international developments of family constitutions (3). This will be followed by examining their regulatory nature (4) and potential legal implications (5).

Note: This article is published in the Max Planck Private Law Research Paper Series with the permission of the rights owner, Kluwer Law International.

Keywords: Family firms, family constitutions, statutes, articles of association, shareholder agreements, codes of governance, protocolo familiar, patto di famiglia, charte familiale