Family Business Defined: Understanding The Definition

Family businesses fuel economies across the world, locally, regionally and globally. From small community-based enterprises to multinational powerhouses, these firms play a pivotal role in shaping economic landscapes. Yet despite their importance, there remains widespread debate about what actually constitutes a “family business.”

At its broadest, a family business can be described simply: an organisation actively owned and/or managed by more than one member of the same family. But over time, more nuanced definitions have emerged, each adding depth to our understanding of these unique enterprises.

One widely accepted interpretation describes a family enterprise as an economic venture in which two or more family members share ownership and demonstrate a commitment to the continuation of the business. This emphasis on both shared stakes and long-term dedication highlights the intergenerational mindset embedded in many family firms.

Another definition focuses on the involvement of multiple family members as major owners or managers, whether concurrently or across different generations. Here, continuity is key, family influence that extends over time rather than within a single moment.

Alternatively, some describe family firms as businesses in which the family maintains control through ownership and active management. In these cases, the family’s role is central, shaping strategy, values and day-to-day operations.

A further measure considers ownership thresholds: if family members hold the majority of shares and at least one plays a managerial or administrative role, the business may fall under the family-business umbrella.

Even listed companies can qualify. When an individual or family controls more than 25% of voting shares, the business may be classed as a family firm, regardless of its public status.

At Family Business United, the working definition brings these ideas together.

A family business is one that is owned and/or managed by at least one family member, with a clear intention to continue as a family-run enterprise in the future.

Crucially, it is a business where family influence, its values, governance, culture and long-term vision, remains central to how the organisation behaves and evolves.

Family businesses are more than organisational structures. They are living, breathing legacies—shaped by generations, strengthened by shared purpose, and driven by values that go beyond profit alone.