This paper studies the impact of corporate governance on the firm performance of Unlisted Family Owned Small Firms (UFOSFs) in the relevance of the argument that owner managed firms apart from being guided by the principles of stewardship theory, not only reduce the agency costs of ownership, but also contribute to increased firm performance. I have employed Regression with Panels Corrected Standard Errors as well as Generalized Least Squares (GLS), which incorporates information about the errors and thereby makes up for the inefficiency of Ordinary Least Squares (OLS) for analysing the balanced panel data. By bringing together, the agency cost theory and stewardship theory and related theoretical perspectives to the traits of family owned small firms, this study offers evidence and throws new light on the competitive advantages of family owned small firms in terms of their positive significance on firm performance. This study is one-off in its approach in studying the importance of the role of corporate governance in the performance of unlisted family owned small firms in India. Perhaps one of the significant contributions of this study to the research field is the development of a theoretical and empirical link between family ownership effects and small firms’ performance. Apart from using primary data from a survey covering the vast regions of India, this study unlike other studies has examined four corporate governance mechanisms (Family Ownership, Board Size, Outside Directors, Audit Committee, Outsiders in Audit Committee, and Family CEO) together.