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How to make sure your business survives your divorce

It’s widely accepted that working with your spouse can be difficult. Running a business together can put a great deal of strain on your relationship – and what will happen to that business if your relationship ends in divorce can cause copious amounts of stress and anxiety.

With Mary J. Blige reportedly filing for divorce from her husband and manager Martin “Kendu” Isaacs, we take a look at what you need to be thinking about if you and your spouse are company directors of your business and decide you want to get a divorce…

 

First, ask yourself what you want

During the divorce process, businesses are looked at as part of your finances. Knowing what you’d prefer to happen to your business before embarking on negotiations can help to build a solid framework for talks with your spouse and their solicitor. For example, do you still want to be involved in the day-to-day running of the business after you divorce? Or would you prefer a clean break from your spouse? Maybe you’d ideally like to still own a share in the company but not be involved in decision making on a daily basis.

Talking with your solicitor about how you see your business after your divorce will help you to come to an agreement with your spouse that is right for both you and your business.

 

How will we make decisions in the meantime?

If you and your spouse are company directors with a 50/50 share of the business, you probably won’t be be able to make any decisions without your spouse’s agreement. It is sometimes possible to put interim measures in place to deal with this – a good corporate solicitor should be able to advise you on this.

 

Can the courts make me sell my shares to my spouse?

If there’s a dispute then courts do have the power to transfer shares between spouses. However, there may be restrictions in your company articles stopping this from happening.

 

Will I have to continue to work with my spouse?

Although unusual, it is possible that if you or your spouse are unable to buy each other out of the business, in a lump sum or instalments, you may have to continue working together after your divorce. Because this can result in an extremely difficult situation, courts try to help couples separate their business interests.

If it’s impossible to separate your business interests, there can be an agreement drawn up that would set out how you and your spouse would run the business and how decisions will be made.

divorce business

 

Will our business need to be valued?

Normally, businesses will be valued by an independent accountant.

 

I can’t work with my spouse anymore – can I resign as Director and deal with the financial side later?

It’s very important that you don’t resign from the company until you have talked to a specialist solicitor and an accountant about your situation. There could be various legal or financial consequences for resigning from the business before the financial settlement with your spouse has been reached.

Businesses and what happens to them on divorce is a highly complex area of law and it is very important that you get specialist legal advice before making any decisions about what will happen to your business.

For more information on this subject please visit our Legal Library.

 

Other articles that may be of interest to you?

Divorce financial settlement and my new partner – What is the effect?

Financial Settlement In Divorce – Your Guide

How to negotiate a financial settlement and the dangers of getting it wrong!

Financial Settlement after Divorce

Divorce Settlement: Who gets what?

What is the divorce process?

When is decree absolute granted in a divorce?

Decree Nisi – What does this mean in a divorce?

What are the first steps to divorce?

Is a cheap divorce really possible?

 

How can our expert divorce solicitors help you with your fair divorce settlement

Our expert family law solicitors can help you with a range of legal issues relating to fair divorce settlements, including:

 

Contact our expert divorce solicitors for advice on your fair divorce settlement

For more information call our divorce solicitors on 0845 862 5001 or email mail@austinkemp.co.uk.

Our expert family law solicitors offer a nationwide service. We have client meeting office facilities available, in order to have face-to-face client meetings / conferences as and when required in:

Leeds Office: St Andrew House, The Headrow, Leeds, LS1 5JW

Wakefield Office: Market Walk, Wakefield, WF1 1QR

Halifax Office: Old Lane, Halifax, HX3 5WP

Huddersfield Office: Northumberland Street Huddersfield, HD1 1RL

Coventry Office: Warwick Road, Coventry, CV1 2DY

Canary Wharf Office: 25 Canada Square, Canary Wharf, London, E14 5LB

Please contact us for more details.

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02nd August 2016

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