This empirical study examines succession planning dynamics in family-owned micro, small, and medium-sized enterprises (MSMEs) in Karnataka, India, utilizing data from 296 family business predecessors and 118 identified potential successors. The research develops and validates a multidimensional framework integrating governance structures, family dynamics, individual characteristics, and contextual factors shaping succession outcomes. Key findings reveal a striking governance-dynamics paradox: while 84.5% lack family councils and 70.3% lack family constitutions, 75.7% report strong family harmony and 76.4% demonstrate high communication effectiveness. This pattern indicates that informal relational mechanisms inadequately substitute for formal governance structures, creating vulnerabilities during leadership transitions. The study demonstrates that succession in emerging market family MSMEs follows reactive rather than proactive trajectories, with untimely predecessor death (34.1%) as the primary succession driver. Succession readiness disparities emerge between predecessor intentions (78.4% report successor training efforts) and actual implementation (only 40.9% achieve full readiness status). Additionally, severe gender underrepresentation (4.2% female successors) indicates substantial underutilization of available talent. Findings underscore that successful succession requires moving beyond informal approaches toward systematic, proactive planning combining formal governance mechanisms, structured successor development, and deliberate tacit knowledge transfer. The study addresses significant research gaps regarding succession dynamics in emerging market MSMEs and provides actionable insights for family business owners, professional advisors, and policymakers.