DEFINITION OF THE TERM: A family business is an organisation in which two or more family members have influence over the management (board of directors) of a business through kinship relationships, by performing leadership roles and/or ownership. A family that owns or runs a family business significantly influences the ownership, management, and strategic decision-making in this business, which they hope will operate for several generations.

HISTORICAL ANALYSIS OF THE TERM: Family businesses, often wrongly perceived as small businesses with a local focus, are the oldest way of doing business. A business is a family business if a family owns it, if its members are involved in running its operations, both current and strategic, and if it is intended to be operational for generations to come. Family businesses have a huge impact on the global economy. Their formation, operations, functioning, and bankruptcies are of great importance for the development of national and global economies. The prospect of running a family business for successive generations and the combination of family and managerial functions contribute to their growing importance.

DISCUSSION OF THE TERM: The article presents the core issues concerning family businesses, including their definitions, essence, role, characteristics, and the issues related to the process of succession.

SYSTEMATIC REFLECTION WITH CONCLUSIONS AND RECOMMENDATIONS: A family business differs from a non-family business in many important aspects, and a family-run business operates differently too. Their specificity stems from the involvement of the owners’ family, both formally and often informally. Economic goals are on a par with non-economic goals. One of the greatest challenges for the operation of a family business is the issue of succession, i.e., the transfer of knowledge, power, and ownership to the next generation. Lack of succession planning is one of the main causes of failure for a family business after the founding generation has retired. Succession is a complex process involving both family factors and business factors. In Poland, the severity of the problem of succession is exacerbated by the fact that most family businesses in this country were established after 1989, so most such companies have not yet faced this problem.