Effectiveness of the family protocol against the articles of association

Abstract

The family business is like any other kind of business, and faces the same problems as any entity. However, the fact that it is family-based gives it certain connotations which distinguish it from others. Thus a specific business culture must be created within the family, with communication channels that are both interconnected but independent. This was the origin of the concept of family protocol as a mechanism to organise the internal aspects of the entity, and applying to the whole of its reality. It not only covers the entity’s economic, financial and organisational circumstances, but also the family’s own values as they wish them to be reflected in the business. It is moreover evident that the family protocol and the articles of association are similar and connected, so it is important that the two documents are consistent. If there is any contradiction between them, the content of the articles of association will always prevail. Given the many and varied clauses making up the protocol document, it alone does not currently have sufficient legal effectiveness to prevail in the eyes of third parties.