To The Long Life Of Your Business

Wills expert Nita Maru discusses the importance of wills to your business and the implications of not having a succession plan in place.

- Nita Maru

In my line of business, I am often found quoting the words of American author and academic John M. Richardson, Jr.

Marked by innate simplicity, it is as simple to practice as it is to preach: “When it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened.”

If you own or co-own a business or professional practice in the UAE, it is important that you plan for its future, and that of your family members, before someone has to sit back and sigh over what went wrong.

As a business owner, a significant portion of your wealth – and possibly your family’s main source of future income – will be tied up in your business. The success of your business succession planning is dependent upon this business being transferred smoothly, or sold to a third party for a fair price.

Either way, it takes considerable planning and preparation, and should be ranked high on a priority task list for all business owners.

Average global statistics estimate that less than 30 per cent of family owned businesses survive to the second generation, and less than 12 per cent to the third. The survival rate for the fourth generation is a meagre 3 per cent.

For expatriates living in the UAE, these figures may be ever more alarmingly lower. The Government of Dubai’s official website emphasises that “The UAE Courts will adhere to Sharia law in any situation where there is no will in place”. This means if you die without having planned your future – or that of your family – the local courts will examine your estate and distribute it according to Sharia law.