Divorcing your Business Partner
Divorcing your business partner
Getting divorced is never easy in any circumstances. This can be even more complicated when spouses are in business together as they rarely consider coming to a commercial arrangement beforehand.
In limited companies, the parties may be co-Directors and equal shareholders, one party may have been added to the business for tax reasons who is not the key person. Partnership Agreements are not always clear.
During the divorce process, emotions can be raw and that can often make decisions more difficult.
Divorcing your business partner, what Usually Happens
It is uncommon and unlikely that you will lose your business or have to sell it if you do not wish to. While the Courts do have the power to order the sale of a business, they are both careful and reluctant to use this power, after all, a successful business is likely to provide for you and your family for years to come.
Coming to an agreement about the future of the business
The most obviously and straightforward way to determine what will happen to your business is to come to an agreement with your spouse. This will often mean a valuation of the business, its assets, shareholdings etc. A Solicitor will guide you through this and facilitate discussions between the parties with a view to reaching an amicable agreement. In some cases, although not common, some couples may continue to run the business and have a good working relationship.
More commonly however, one party usually buys out the other party’s interest in the business.
Splitting the assets of a business
Dividing business assets can be complicated so we would always advise seeking specialist legal advice on your position and your own particular circumstances.
Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.