Divorce can have an impact on your business!
Added: (Tue Oct 06 2009)
Pressbox (Press Release) -
Historically, it has always been assumed that a family business would be protected during a divorce, however, recent case law has shown that this may not always be the case say Divorce Specialists Hartnell Chanot & Partners.
'The way business are treated in divorce has changed due to the landmark case of White vs White' said Rachel Buckley, a Partner at the firm. 'Mrs White was awarded a 40% share of the couple’s farming business, making it necessary to sell the business in order to fund her settlement.'
On divorce, businesses now form an integral part of financial settlements and are considered to be an asset alongside the matrimonial home, investments and pensions. Settlements are now focused on respective contributions to the business and homemaking during the marriage with both being considered as of equal importance. The courts are required to test their proposed division of assets against a yardstick of equity, which for most cases is a 50/50 split. In awarding a settlement, the courts will therefore consider the family business together with any other family assets and depending on the individual circumstances this could mean the business having to be sold.
Rachel Buckley added, 'The Courts now routinely ask that businesses and business interest’s are valued by a single joint expert who will act on behalf of both parties to assess the business with a view to making a valuation. As an asset, your business is going to be under scrutiny. There are measures you can take in order to reduce the impact on your business, but it does, of course, depend on whether the business was started before or during your marriage, who started the business, whether your spouse was active in the business and if they want to remain so. These issues are best discussed with a solicitor in order that they can best build your case.'
Following this, these are some of the avenues you may be able to pursue.
Does the business have separable assets?
Do you have any non-business assets you can transfer?
Paying installments over a period of time
Paying your spouse a proportion of the net proceeds in the future
Can you continue to run the business together in some form?
Maintenance
All businesses are unique and a full knowledge of the nature of your business and how it operates will assist a solicitor with your case.
Further advice and tips on how to protect your business can be found on-line at http://www.hartnellchanot.co.uk