What is Family Owned Business?

India boasts a rich and illustrious list of family owned businesses, as family businesses contribute around 79% of national GDP annually.

This model of enterprise has survived through the British Raj and the post-Independence controlled-economy phase, and has flourished in the post liberalisation stage since 1991.

A family owned business may be defined as any business in which two or more family members are involved and majority of the ownership and control lies within that family. It is a commercial organisation in which decision making is influenced by multiple generations of a family, related either by blood or marriage.

The owners are closely identified with the firm through leadership or ownership. Family owned businesses are the oldest form of business organisation.

The origin of family business in India is traced back to the bazaar system in the ancient times. Today, some of the major family owned businesses are – Bajaj, Ambanis, Mahindras, Adanis, Dalmias, Jindals etc.

Keeping business ownership within a family is a deeply-rooted practice that surfaced after 1900 with their share of total capital growing consistently, while that of the British declined concurrently from 1900 to 1947.

This model of enterprise has survived through the British Raj and the post-Independence controlled-economy phase, and has flourished in the post liberalisation stage since 1991. Today, India boasts a rich and illustrious list of family owned businesses, as family businesses contribute around 79% of national GDP annually.

India has 108 publicly-listed, family-owned businesses, making it the third-highest in the world behind China at 167 and the United States at 121 (as of 2015). Globally, more than 30% of all companies with sales of over $1 billion are family businesses – names such as Walmart, Porsche, Volkswagen, Nestle, Aldi, the Roche Group, L’Oreal, Ikea, and Heineken.

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