Family businesses the world over don't have a very long life, according to professional services firm Grant Thornton.
"Less than ten per cent of family businesses make it to the third generation and less than 50 per cent make it to the second generation, as per our estimates," Grant Thornton International divisional director (Asia Pacific) Gabriel R Azedo said.
In other words, less than 10 per cent of family businesses retain their original form and structure up to three generations of the business being founded.
The others either get taken over or get professionalised with the family losing control. In some cases, these businesses even become extinct within this timeframe.
"There are exceptions like several property groups in Hong Kong have survived for many generations. But largely only a handful of family businesses survive to the third generation," Azedo added.
A family's ownership of a business, according to Azedo, invariably comes in the way of the business' growth.
"There is a limit to which the family can invest. If a business wants to grow, it has to get investments from other shareholders," he said adding: "We have seen a reduced reluctance to give away control among families in the Asia Pacific region in the last few years. The desire to retain control is more pronounced in situations where capital is either scarce or expensive."
According to Azedo, the culture of business families across Asia is very much the same except in Japan and South Korea where business is dominated by very large corporations.
"We find that families in Asia including India are more closely-knit than in Europe or the US," he added.
Azedo added that listed companies which are controlled by families are likely to get a lesser price-earnings ratio in the stock markets as compared to professionally managed companies.
"A publicly-listed company dominated by a single family is perceived to favour the family's interest by the investors," he said.
Grant Thornton had recently come out with global study on family businesses which said that while businessmen the world over are handing over the reins to professionals, retaining control over the business and passing it on to the next generation is still the driving passion for most Indian businessmen.
The study said that as many as 46 per cent of Indian businessmen feel that their successor should be from within the family. In comparison, only 22 per cent of North Americans and 24 per cent Europeans subscribe to such a viewpoint.