The Personal Fund as a Mechanism for Family Business Succession in Russia

The article studies the impact of the personal fund structure on ensuring family business succession and transforming traditional approaches to succession planning. The conclusion is substantiated that transferring key assets to an independent legal entity enables the founder, during their lifetime, to establish a stable governance model for the family business, define the procedures for asset utilization, and secure the financial interests of family members after their death. The significance of a personal fund is examined in terms of preserving unified corporate control, preventing the fragmentation of ownership interests and shares among heirs, mitigating the risk of inheritance and corporate disputes, and maintaining the continuity of a family business. Particular attention is paid to separating the functions of business management from the receipt of economic benefits: heirs and other family members can act as beneficiaries of a personal fund without being directly involved in managing the company. The article analyzes the specific features of the legal status of beneficiaries and separately examines the property qualification of 100 million rubles established by the civil law which is required for the creation of a lifetime personal fund. The conclusion is made that the high qualification amount limits the accessibility of this structure for small and medium-sized enterprises, even though they are also exposed to the risks of inheritance disputes and business fragmentation. Proposals are formulated regarding the possible differentiation of the legal regulation of personal funds established specifically for managing family businesses. In conclusion, the need to align the articles of association and terms and conditions for personal fund management with the founder’s prenuptial agreement, divorce settlement agreement, and testamentary dispositions is emphasized.