In most of the countries, much of retail trade, small industry and all types of service are in the hands of the family, from the corner store to the most high-tech manufacturing items. More than 70 percent of the hundred largest corporations and 99.9 percent of all enterprises in India are either family-owned or controlled. Not surprisingly, this has had a significant impact on the conduct and development of business in the country. The family business exhibits distinct operational characteristics and also unique set of problems and challenges. It is against this backdrop, the present paper is devoted to discuss the nature of family business in India and also unfold the unique challenges and problems in family owned businesses. Further, suggestive measures have also been provided to make family business more effective in India.