New law will facilitate transfer of business between family members

The government has started working on a Family Business Act which will facilitate continuity on the transfer of family businesses, Economic Affairs Minister Chris Cardona said. He said the new law would include a clear definition of 'family business' in order to deter abuse.  The law, he said, was in line with government action to boost every sector of the economy. Family businesses, he said, should not be disadvantaged because of their composition. He noted that no direct reference to them had been made in the 2011 Small Business Act. Some 75% of businesses in Malta are family-controlled. Most are transferred to a second generation, but many fail during this transition. Only 10% make it to the third generation. Some 31,000 small family businesses employ between one and five persons for a total of 38,000. Other employ between 250 and 500.  Dr Cardona said there was clearly a need for a legal framework to guide family business planning, particularly the transfer of business among the members of the family.  The issue will be discussed with all interested stake-holders.