Sample Essay

There is a correlation between excessive regulation and failure of family business to survive beyond first generation. Some family business would close their doors if complying with regulations is expensive. In the opposite side companies stay in business operation with a sort of inheritance tax exemption. This shows that it is undesirable to levy inheritance tax if tax paid by assets of the business hinders the business sustainable long term growth.

According to Anslow (5) companies that achieve succession smoothly promote economic sustainability. Otherwise, family businesses are likely to experience management difficulties or in the worst case, they become incapacitated to meet their financial obligation (insolvency). In case of failed or strained succession, discontinuity might arise in the business which affects the business itself, employees’ job security and stability of national economy. Transfer of wealth is made either by one’s death or a gift between living people.

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