Session on Succession Planning

Date : 07-06-2013
Venue : GCCI Committee Room
Description :

Gujarat Chamber of Commerce & Industry and Centrum Wealth Management Limited jointly organized a session on “Succession Planning” to brief promoter group families on various aspects of managing family business and succession planning. GCCI President Shri Prakash Bhagwati, in his welcome speech, highlighted the value system that should be embedded in the successor at the time of transition and also described timeless core values and beliefs which make good companies to last for a long time. Dr. Arti Trivedi, Director of Chimanbhai Patel Institute briefed about how to manage family business successfully and how to detach from the business by controlling emotions, identifying proper time, identifying suitable person from family, identifying intention and capability of person, building trust, balancing, etc. There should be balance between Family, Business and Ownership through Trust. Shri Dhinal shah, Partner, Tax and Regulatory services, Ernst & Young LLP and Chairman of GCCI Direct Tax Committee expressed that Family Businesses are able to withstand economic downturn or recession. However, in European and Western countries, 30% of first generation, 13% of second generation and only 3% of 3rd and 4th generation are able to be successful in family business. Only 22.7% people are willing to join family business. Major reasons for next generation for not joining family business are lack of interest, no growth opportunity perceived by them in their family business, various other business opportunities available in the market, different perception than the elders of the family etc. Various countries like Mexico, Sweden, Russia, India, etc. removed levy of estate duty or inheritance tax due to its higher administrative cost and its failure in achieving equality or balance between rich and poor. However, inheritance tax is again expected to be levied in India. Shri Dhinal shah briefly explained the difference between provisions of estate duty levied earlier in India and inheritance tax expected. He also presented different provisions for inheritance prevailing in various countries like UK, USA, etc. Shri Rajesh Subramanian, Regional Director of Centrum Wealth concluded the session with Vote of Thanks.