We note at the outset that the term «family entities» is a term that may refer to a sole proprietorship or to well-known types of entities such as general partnerships or limited liability companies, but which were formed among partners who were already connected by another bond prior to their business partnership.

This bond may be a family relationship, friendship, or a working relationship… etc. Consequently, this bond—which predates the commercial venture—remains the dominant factor in these entities, and courtesy, trust, and mutual reliance remain the general character and common denominator that govern these companies" meetings and decisions.

It has become customary to include large individual enterprises within the category of family entities when discussing them in various seminars and forums held on this subject, such that the speaker or panelist refers to family entities, including those large individual enterprises. Some refer to these establishments as "family companies,« and from among these terms, we have chosen the term "family entities" because it best encompasses all these legal forms.

We can define them as any commercial enterprise managed in a family-oriented manner, where relationships other than work relationships predominate, and where management is based on courtesy, trust, and interdependence —as mentioned earlier—such that these characteristics form the general nature and common denominator governing these companies" meetings and decisions; they may take the form of a sole proprietorship or a corporation.

Obstacles to the Development of Family-Owned Entities and Their Challenges

The problems and challenges facing family-owned entities are diverse, and it is rare for an entity to be entirely free of them, even if it appears to be so; courts in the Gulf states are inundated with cases involving these entities, These cases are characterized by a common nature: they are either disputes among heirs—which are the most prominent disputes and cases—or they result from disagreements over management, authority, or decisions, etc.

Since these entities are managed in a personal manner, the impact of these disputes is both immediate and devastating, and its effects extend to other parties unrelated to the partners’ disputes, such as the employees of these entities.

From the book *Family Entities*