Are there any restrictions on employing family members?

 

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7. Are there any restrictions on employing family members?

In general, no, unless employees are legally required to have specific qualifications or experience.

In practice, even if you wish to encourage your children (for example) to work for the business, you should require them to at least meet the entry requirements you place on other recruits. Otherwise you risk having incompetent family employees who do not feel the need to apply themselves and are resented by other employees. Other shareholders, particularly from outside the family, may also object if you employ unsuitable family members.

You may wish to include a requirement like this in your shareholders' agreement. Not only does this make the position clear, but it also makes it easier for you to refuse to recruit unsuitable family members.