Naji Khairan Advocates & Legal Consultants specialized in working with family-owned businesses in Saudi Arabia. The company’s founding partners have authored several articles, participated in interviews, and conducted workshops both within the Kingdom and internationally, focusing on family-owned businesses and related legal matters.

1. Family constitution:

Building strong, clear relationships within a family is crucial, and a family constitution plays a key role in establishing solid foundations and clear milestones. With recent developments in the legislative system, the family constitution has become even more significant, particularly with its increasing relevance to the articles of association of companies, depending on the nature of the business.

At NKL, we offer a range of services to support families in the creation and implementation of their family constitution:

• Support in Drafting the Constitution: We guide families through the process of drafting their constitution by conducting workshops, facilitating consensus on the vision, and ensuring the content aligns with the family’s structure and future direction.
• Drafting the Final Constitution: We prepare the family constitution, ensuring it reflects the agreed-upon vision and goals.
• Legal Review: We conduct a thorough legal review of the family constitution (if drafted by others) to ensure its compliance with the regulations in the Kingdom of Saudi Arabia.
• Implementation Support: We assist in implementing the contents of the family constitution within the family business.

2. Mediation, Conflicts resolution, and family relationship management:

It is natural for differences of opinion to arise among family members, even when the founder is present and active in decision-making. These differences can sometimes escalate into disagreements that threaten family wealth and status, especially if disputes reach the courts.

Therefore, it is essential to have skilled professionals who can absorb the points of disagreement, create a space for consensus, manage the settlement process, and work toward objective solutions that are acceptable to all parties, thus protecting family wealth.

This process must be managed with confidentiality and trust to preserve the family’s reputation. Moreover, it is crucial that the reconciliation is clearly documented and legally binding, so it can be referred to when necessary.

3. Inheritance management:

Upon death, the distribution of the estate must be managed through a process that ensures all assets reach the rightful heirs while preventing conflicts among them. This requires professionals with the necessary expertise.

While the issuance of the inheritance deed has been simplified, estate management is not a straightforward process. The complexity increases with growing wealth, both within and outside the Kingdom, the diversity of assets, and the intertwining of relationships and entitlements with others.

A key issue that requires effective management is the claims by family members to distribute assets that have become communal. These disputes can lead to court cases and forced division of assets, which may harm the interests of all involved.

4. Wealth Legal Structuring Services:

It is crucial to clearly define and distinguish wealth to prevent overlapping between personal assets of the family members, and corporate property. Effective wealth management, including personal wealth, family-owned businesses, and philanthropy or endowment, is essential for ensuring the sustainability of wealth and its smooth transfer across generations with minimal disagreements.

Taking the initiative to properly manage and structure wealth sustainability at an early stage, is key to achieving the best results. NKL can provide the following support:

• Assistance in developing a methodology for defining wealth in accordance with the Family Charter.
• Guidance on structuring and organizing personal wealth shared by family members.
• Support in structuring and organizing family business assets.
• Implementation of the structuring plans approved by the family.

5. Structuring, Legal review and Corporate Governance Services

Family-owned businesses often serve as the foundation of family wealth, which must be preserved and managed in a way that aligns with both the company’s growth and the evolving family assets. As legislative developments continue in the Kingdom, it is essential for family businesses to proactively review their documents and ownership structures, incorporating the family constitution into their legal frameworks.

When addressing ownership structure, it is crucial to develop a clear strategy for inheritance, management, and continuity to ensure the company’s long-term success. The structure and governance must not only support smooth operations but also positively impact the company’s value. Additionally, careful attention must be paid to the potential tax implications arising from restructuring.

Among the services provided by Naji Khairan Advocates & Legal Consultants in this area are:

• Conducting a legal assessment of family-owned companies and issuing a diagnostic report highlighting legal gaps and proposing solutions.
• Restructuring assets to ensure sustainability and continuity of businesses.
• Organizing governance in line with prevailing regulations and the principles outlined in the Family Charter.
• Drafting Shareholder Agreements.

6. Endowment services

Traditionally, authentic Saudi families have made significant contributions to society by establishing endowments, ensuring their family’s legacy while benefiting the community in the present. To preserve the continuity and sustainability of these endowments, it is essential to manage them in a practical and systematic manner.

Among the services provided by Naji Khairan Advocates & Legal Consultants are:

• Drafting endowment clauses.
• Assisting with the endowment process, including the issuance of the endowment deed and its registration with the General Authority of Endowments.
• Endowment Governance