When good intentions meet business reality, ownership planning becomes the real test

For many business owners, the hardest part of building a company isn’t making money — it’s figuring out how to pass it on without breaking the family. Day after day, they focus on revenue, cash flow, and expansion, yet quietly avoid one uncomfortable question: what actually happens to the company shares if I’m suddenly not around? The common answer sounds reasonable — write a Will and split everything equally among the children. But in practice, this is where many family conflicts begin. Businesses are not cash accounts; they involve control, decision-making, and differing capabilities among heirs. This is exactly why Share Succession Planning exists — to move ownership transfer out of emotional assumptions and into a structured approach that protects both the business and family relationships before it’s too late.

Honestly, relying solely on a Will to split shares can “paralyze” your company

Probate is the time cost that bosses always overlook Many people think writing a Will is the end of the story. But under Malaysian law, a Will requires a court process called Probate. This takes months, sometimes years. During this period, shares in the boss’s name are “frozen.” If the company needs to sign a major contract, apply for a bank loan, or requires a majority shareholder’s signature for a pivot, the entire business comes to a standstill. A lot of Asians get stuck here because they don’t realize that a “vacuum” of a few months is enough to destroy a brand built over thirty years. In business, every second counts. By the time the court order is out, your employees might have already moved on.

Is “splitting shares equally” really fair? It’s often a ticking time bomb

When “outsiders” hold the power of decision Imagine this: the eldest son has been helping in the business for years, the daughter lives overseas, and the youngest son is still a student. If you split shares equally, it means the daughter and youngest son—who might know nothing about the daily operations—suddenly have voting rights in the boardroom. If the daughter wants dividends to buy a luxury bag while the eldest son wants to reinvest profits into R&D, conflict is almost inevitable. This is why traditional Share Succession Planning must move beyond “dividing inheritance” and focus on “corporate governance.” Without pre-set rules, everyone ends up in court. Usually, the only ones happy in that scenario are the lawyers, not your family.

Share Trust: Separating control from the right to receive income

The importance of a neutral role in these situations To avoid family fallout, savvy business owners choose to place their shares into a trust structure. Simply put, the “legal title” of the shares is held by a trustee, but the “money (dividends)” still goes to the family. Even if the boss is no longer around, the trustee follows a pre-written “script” to ensure the company is managed by professionals while the family receives a steady income for their living expenses. In such a situation, an entity like Global Asset Trustee (M)Berhad usually plays a more neutral, administrative, or assistive role. They don’t interfere with your business logic, but they strictly enforce the rules you’ve set, preventing any impulsive heir from making a mess of things.

Protecting minor beneficiaries from “outsiders” or mismanagement

Real-world Dividend Distribution to Minor Beneficiaries In Malaysia, children under 18 cannot legally hold shares or receive large sums of money directly. If a business owner passes away suddenly, these dividends might be mismanaged by a guardian or flow to an outsider if a spouse remarries. Through a trust, you can specify that funds are used only for the child’s education or healthcare, or even dictate that they only receive the full asset once they reach a mature age like 30. This risk-isolation isn’t just about guarding against “bad people”; it’s about protecting the next generation who isn’t ready to manage wealth yet.

Follow the legal framework so your succession doesn’t look like “tax evasion”

Companies Act 2016 and the compliance red line In Malaysia, any change in shareholding structure must comply with the Companies Act 2016. Some bosses try to save money by signing private “under-the-table” agreements. However, if something goes wrong and SSM (Companies Commission of Malaysia) investigates, or if creditors challenge the agreement, you could lose the company and face legal trouble. This is why mature entrepreneurs look for professional trust companies to handle a Corporate Share Trust for Entrepreneurs. It ensures every step is compliant. It’s not just about saving money; it’s about buying peace of mind.

Website: Global Asset Trustee (M) Berhad
Email: admin@globalassettrustee.com.my
Contact Number: 03-9771 5159
Address: A-13-4, Block A, Northpoint, 1, Medan Syed Putra Utara, Mid Valley City, 59200 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur