For many families, the business is more than their largest asset. It represents decades of work, family identity and the source of future wealth. Passing that business successfully to the next generation often requires more than simply writing a will.
One option that internationally minded families frequently consider is holding the business through a long-term ownership structure, such as a trust, private trust company (PTC) or foundation. These structures can help provide continuity of ownership while creating a framework for governance and succession. The right approach depends entirely on the family's circumstances, so independent legal and tax advice is essential before implementing any structure.
Why succession planning for a family business is different
Unlike a portfolio of listed investments, a family business cannot usually be divided equally without consequences.
Questions commonly arise such as:
Who should own the business?
Who should manage it?
Should all children inherit equally?
What happens if one family member wants to sell?
How are future generations brought into ownership?
How can the business continue if key individuals retire or die?
Without planning, these questions can become difficult to answer at precisely the moment a family is already dealing with a significant transition.
Why families use ownership structures
Many families separate ownership from management.
This allows the business to continue under stable ownership while professional management—or the most appropriate family members—run the company on a day-to-day basis.
Rather than transferring shares directly to multiple individuals, ownership may instead be held through a long-term structure designed to support the family over several generations.
The objective is rarely to remove flexibility. Instead, it is often to create stability while allowing the family to adapt as circumstances change.
Can a trust own a family business?
Yes.
In many jurisdictions, a trust can hold shares in an operating business in the same way it can hold investment portfolios or real estate.
The trustee becomes the legal owner of the shares and administers them in accordance with the trust deed and applicable law, while the beneficiaries remain those who may ultimately benefit from the trust.
Holding a business in trust can provide continuity of ownership even as family members change across generations.
However, businesses require active oversight, and administering a trading company is often more complex than administering financial investments alone.
What is a Private Trust Company (PTC)?
A Private Trust Company (PTC) is a company established specifically to act as trustee for one family's trusts.
Rather than appointing an external corporate trustee directly, the family appoints the PTC as trustee.
The directors of the PTC may include family members, trusted advisers and independent professionals, depending on the family's objectives and the legal requirements of the relevant jurisdiction.
A PTC can offer greater familiarity with the family's affairs while retaining the advantages of a trust structure. It may also provide greater flexibility for families with complex operating businesses, significant private investments or multiple branches of ownership.
Whether a PTC is appropriate depends on the family's circumstances, the jurisdictions involved and the level of governance required.
Can a foundation hold a family business?
In some jurisdictions, yes.
A foundation is a legal entity that can own assets in its own name. Unlike a trust, which is a legal relationship between parties, a foundation has its own separate legal personality.
Some international families use foundations as long-term ownership vehicles for businesses, particularly where foundations are well recognised under local law.
As with trusts, the suitability of a foundation depends on the family's objectives and the jurisdictions involved.
Governance is just as important as ownership
A well-designed ownership structure is only part of successful succession planning.
Many long-lasting family businesses also invest heavily in governance.
Governance refers to the processes and arrangements that help families make decisions, manage disagreements and prepare future generations for responsibility.
Examples include:
Family constitutions.
Family councils.
Shareholder agreements.
Investment committees.
Education programmes for younger family members.
Letters of wishes.
Succession policies for leadership roles.
These arrangements help answer practical questions before disagreements arise.
For example:
How are major business decisions made?
When can family members join the business?
How are dividends determined?
What happens if someone wants to exit?
How are future leaders selected?
Good governance often becomes increasingly valuable as businesses pass to second, third and later generations.
Not all trustees administer operating businesses
A common misconception is that all trustees administer the same types of assets.
In practice, there can be significant differences in experience and capability.
Many trustees primarily administer bankable assets, such as:
Cash.
Listed investment portfolios.
Bonds.
Public market securities.
However, many internationally minded families also own non-bankable assets, including:
Operating businesses.
Private company shares.
Commercial and residential property.
Private equity investments.
Venture capital interests.
Intellectual property.
Art collections.
Aircraft and yachts.
These assets often require different expertise, more complex administration and closer coordination with lawyers, accountants, investment advisers and family members.
If a family business forms part of a trust or similar structure, it is worth asking whether the trustee regularly administers operating businesses and understands the practical issues that accompany them.
Choosing a trustee for a business-owning structure
If a trust or similar structure will hold an operating business, practical questions to consider include:
Do they have experience administering family-owned businesses?
Have they worked with private company shares and complex ownership structures?
Can they coordinate advisers across multiple jurisdictions?
Are senior decision-makers available when significant business matters arise?
Can they support governance arrangements alongside the legal structure?
Do they have experience administering other non-bankable assets where relevant?
The answers may be more important than the size of the organisation itself.
Common questions
Can a family continue running the business if it is held in trust?
Often, yes.
Ownership and management are separate concepts. A trust may own the shares while directors and executives continue managing the company in accordance with its governance arrangements.
Does putting a business into trust change how it operates?
Not necessarily.
The day-to-day operation of the business may remain largely unchanged, although ownership, governance and decision-making arrangements may differ depending on the structure.
Are trusts the only option?
No.
Depending on the jurisdiction and the family's objectives, alternatives such as foundations, holding companies or Private Trust Companies may also be appropriate.
The right solution depends on legal, tax and family considerations, which is why independent professional advice is essential.
Conclusion
Passing a family business to the next generation is about far more than transferring ownership. It involves creating a framework that supports continuity, effective decision-making and long-term stewardship.
Trusts, Private Trust Companies and foundations can all play a role in holding operating businesses where appropriate. Equally important are the governance arrangements that help families navigate leadership transitions, changing priorities and future generations.
For families with businesses, property and other non-bankable assets spread across multiple countries, choosing experienced advisers and fiduciaries who understand both complex assets and cross-border administration can help ensure the ownership structure continues to support the family for decades to come.