Bahrain Family Business Association Calls for legislations to Protect Family Business’
Bahrain must create legislation that is dedicated to protecting the interests of family businesses, says a local entrepreneur.
Ninety-four per cent of all businesses in Bahrain are family-owned, yet there are no laws defining what constitutes a family business, said Arab Centre for the Development of the Arab Family Business board member Dr Yousef Mashal.
'The government should start implementing new rules and regulations that will free family businesses from the strict conditions of the usual limited liability and public companies,' he said.
'Some countries have created private-public limited companies, which are a combination of limited and public companies.
'BMW, Ford and Kellogg's for example are family businesses that are run according to special laws and this is needed because if anything happens to the company it will affect the family directly.'
Dr Mashal said new legislation would also help family businesses survive to the second and third generations and beyond.
He said it was also crucial for each business to create a family council, which would be responsible for solving problems and helping develop the company.
According to the latest study by the centre, 52.7 per cent of family businesses in Bahrain are still run by the founders and 40.2 per cent by the second generation.
A total of 48.7 per cent of businesses have less than two of the founding members still involved in the business, indicating they must still be young companies and still in the hands of the owner, added the board member.
'Only 1.4 per cent belong to the third generation,' said Dr Mashal, who is also Mashal Group chief executive officer.
'And 28.5 per cent of family businesses were started by founders after finishing secondary school, which tells us that companies are still managed by high school educated owners.
'11.7 per cent of parents would like their children to work in the family business, but the tendency is to let them make up their own minds.
'And 62.9 per cent of the second generation regret having worked in the family business.'
Meanwhile, the future challenges facing family businesses in Bahrain will be discussed at a forum at Beit Al Quran, Manama, from 8.30pm tonight.
It is organised by the Bahrain Family Business Association.
Association president Khalid Kanoo said that because around 95 per cent of businesses were family owned, they were strategically important to the national economy and therefore needed to be better protected.
He said 30 per cent of family businesses worldwide carry on to the second generation, 14 per cent to the third generation and only three per cent continue into the fourth generation and beyond.
'The problems facing these businesses include globalisation and expansion of the market and therefore extensive efforts are needed to make them more competitive,' he said.
'The current and future challenges facing these businesses should be of great importance and policies are needed to strengthen their protection.' (Trade Arabia News Service)
Ninety-four per cent of all businesses in Bahrain are family-owned, yet there are no laws defining what constitutes a family business, said Arab Centre for the Development of the Arab Family Business board member Dr Yousef Mashal.
'The government should start implementing new rules and regulations that will free family businesses from the strict conditions of the usual limited liability and public companies,' he said.
'Some countries have created private-public limited companies, which are a combination of limited and public companies.
'BMW, Ford and Kellogg's for example are family businesses that are run according to special laws and this is needed because if anything happens to the company it will affect the family directly.'
Dr Mashal said new legislation would also help family businesses survive to the second and third generations and beyond.
He said it was also crucial for each business to create a family council, which would be responsible for solving problems and helping develop the company.
According to the latest study by the centre, 52.7 per cent of family businesses in Bahrain are still run by the founders and 40.2 per cent by the second generation.
A total of 48.7 per cent of businesses have less than two of the founding members still involved in the business, indicating they must still be young companies and still in the hands of the owner, added the board member.
'Only 1.4 per cent belong to the third generation,' said Dr Mashal, who is also Mashal Group chief executive officer.
'And 28.5 per cent of family businesses were started by founders after finishing secondary school, which tells us that companies are still managed by high school educated owners.
'11.7 per cent of parents would like their children to work in the family business, but the tendency is to let them make up their own minds.
'And 62.9 per cent of the second generation regret having worked in the family business.'
Meanwhile, the future challenges facing family businesses in Bahrain will be discussed at a forum at Beit Al Quran, Manama, from 8.30pm tonight.
It is organised by the Bahrain Family Business Association.
Association president Khalid Kanoo said that because around 95 per cent of businesses were family owned, they were strategically important to the national economy and therefore needed to be better protected.
He said 30 per cent of family businesses worldwide carry on to the second generation, 14 per cent to the third generation and only three per cent continue into the fourth generation and beyond.
'The problems facing these businesses include globalisation and expansion of the market and therefore extensive efforts are needed to make them more competitive,' he said.
'The current and future challenges facing these businesses should be of great importance and policies are needed to strengthen their protection.' (Trade Arabia News Service)
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