two men arguing about business

A self-described “spare,” Prince Harry is a prime example of a problem-child in a family business. 

The British Royal Family, sometimes referred to as “The Firm,” is the quintessential family business. The King runs it. The members have a line of succession. The Firm employs thousands of people. The senior royals are not on a household payroll, but they can access the sovereign grant, which are public funds granted to the King. They are publicly accountable for the funds, cannot make money from their name and must remain politically and commercially independent.

The Firm has weathered tough times, but Prince Harry, who came one step closer to the throne with the death of his grandmother Queen Elizabeth, is behind the latest ruckus. He and his wife Meghan have gone all-out in a publicity war against The Firm. Victims in their own mind, they are proclaiming their grievances from the tallest of mountains in the loudest of voices. The business of the royal family is under assault, and the royal family is not pleased. 

Those in a family business can sympathize. The rules under which the senior royals function are not unlike bylaws or an operating agreement in the type of family business that we mere commoners run. The rules must be followed by all family members for a family business to thrive, or even survive. So, albeit with considerably less pomp and circumstance, even the smallest of family businesses can be thrown for a loop when a family member goes astray. Relationships can be strained. Business decisions are made against a backdrop of emotions. Spouses tend to interfere. Sons and daughters can develop a sense of entitlement. One family member’s substance abuse problem can cause cascading issues. Expectations and duties conflict. Sabotage from inside and outside can occur.

Dealing With an Unruly Family Member

The question is what to do when a family member refuses to cooperate with the other family members in the family business. The royal family in England has a history of dealing with inconvenient family members. Some have been beheaded, others imprisoned, still others sent off to die in a war in a distant land. 

Alas, those options are no longer on the table. Here are a few less violent, but no less effective suggestions on how a family business can deal with an errant family member.  

  • A family business should be a business first, and a family second. Check your business entity agreement.  Depending upon the type of entity, there should be written bylaws, an operating agreement, or a partnership agreement. The agreement may address what to do in the event of a dispute. If there is no entity agreement, then turn to the statutes to determine the default rules. 
  • Review your employment manual and any buy-sell agreement. 
  • Approach the errant family member as you would a valued employee. For example, you would not, or should not, corner an employee at a holiday function and yell at him. Seek to meet on neutral ground for a rational discussion about the business interest. Try to keep the family guilt part out of the talk. Spouses should not attend.   
  • Develop a way for the family member to gracefully exit the business without destroying it. Throw in a mutual non-disparagement clause. 
  • If peace cannot be negotiated, then consult your lawyer. Do not trash your family member on social media, in an Oprah interview or in a book. Remember that while you may be able to fire a family member from the family business, you cannot fire him from the family.

Hammerle Finley Can Help

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Virginia Hammerle is in her fourth decade of practicing law. She is Board Certified in Civil Trial by the Texas Board of Legal Specialization and an Accredited Estate Planner. Contact her at or visit This column does not constitute legal advice.