If you’re in business with your partner, it’s essential to make sure that your money and your share of the company is protected just in case you split up. You also need to take steps to protect the health of the business and to make the right arrangements for its future.
Worst case scenarios
Some couples have a pre-nuptial agreement before they get married, and most also have documentation for house and property ownership. This helps professionals like Liverpool solicitor Tracey Miller to negotiate settlements and work out who is entitled to what during a divorce.
However, not all couples who own a business together have documentation outlining clearly outlined shares in the company and what should happen if the couple split up. Without such documentation, there are quite a few unpleasant things that could happen:
- 1.A business decision may be required during divorce proceedings – but if you can’t agree, the company could be wound up
- 2.Business assets could be divided 50/50. If you put a lot more time and money into the business than your partner, you could stand to lose a significant amount
- 3.Your partner could hide assets ahead of divorce proceedings. Divorce lawyers dealing with business assets see this all too often, where one partner delays preparing accounts of gifts away assets to a friend with the intention of buying them back later.
Tips for protecting yourself and the business
It may not be the most romantic proposition in the world, but if you’re happily married and own a business with your spouse – you absolutely need to draw up documentation covering the terms of the working relationship. Get a contractual agreement in place outlining what happens if the partnership ends. You should also:
- Transfer all intellectual property rights to the company
- Agree restrictive clauses preventing spouses from stealing clients or sharing confidential information if the partnership ends
- Specify who owns what shares and clearly document all loans to the company
- Get your financial and legal documentation in order
If you can go into negotiations with the intention of securing a fair and amicable solution for everyone, this is far better than letting bitterness win. Choose mediation and arbitration over litigation if you possibly can. Prepare thoroughly for every stage of the process, ensuring all required legal documentation is completed and in order.
If you’re already in a difficult situation with regards to a divorce and your business arrangements, the first thing to do is to get yourself a good solicitor. Tracey Miller Family Law is one of the most experienced law firms Liverpool has to offer, and the team have dealt with many cases involving shared ownership of businesses.