Divorce will certainly have an impact on your business. Historically, it has always been assumed the family business would be protected during a divorce, however, recent case law has shown that this may not always be the case.
Today, the family business is considered to be an asset alongside the matrimonial home, investments and pensions. Every divorce is different and the court now considers all the family circumstances when arriving at a settlement.
As an asset, your business is going to be under scrutiny and you will be required to make a full and frank financial disclosure. In addition to this, it’s always helpful to sit down with your solicitor and flesh out this information. All businesses are unique and a full knowledge of the nature of your business and how it operates will assist your solicitor with your case.
Some points you may wish to consider:
- What are your plans for the business – do you want to run it as a sole trader?
- Were you hoping to leave it to your children?
- Who set up the business?
- A realistic idea of how much contribution your spouse has made historically and at present.
- Who else is involved in the business? For example, are there business partners outside the family whose livelihoods would be affected?
- What is the position with regard to the sale of shares?
- How is the business weighted financially?
- Is it capital heavy and income light like a farming business or capital light and asset heavy like a consultancy?
- What are the strengths and weaknesses of your business in today’s market?
- How do you see the business performing in the future?
- What are your plans for the business? Include what they were during your marriage and now you are getting divorced.
Litigate or Collaborate?
Divorce, especially where business and children are involved is a highly specialised area of law and to ensure the best possible outcome, it is vital you take appropriate legal advice.
If you are both genuinely seeking a fair solution and feel you would be able to meet round a table with your respective solicitors, collaborative law may be the answer. Often more cost effective than traditional legal involvement, the process involves a series of four-way meetings with your solicitors where the issues surrounding your divorce are discussed with a view to reaching resolution. Once resolution is reached, it can be made into a formal agreement or court order in the same way. Only those trained in collaborative law can practice, so both of you will need to select a collaborative solicitor.