With 42 percent of marriages in England and Wales ending in divorce, it’s no wonder that hard-working entrepreneurs might want to protect their businesses from being fractured by divorce proceedings.
While it could seem unromantic at the prenuptial stage, it’s worth thinking about the impact of a future break-up on staff, property and ultimately business ownership. Including an obligation in the business’ partnership agreement or articles of association requiring joining members to enter into a nuptial agreement, for example, can be particularly helpful. One can even prescribe details about the transfer of shares.
Samantha Newton, associate solicitor in family law at Thrings, told Insider: “When it comes to a divorce’s financial settlement, a court can’t make an order against a limited company itself, but could request a business to be valued – with a view to extracting capital from it. Needless to say, the impact on the business’ ability to invest in the future could be severe.”
The time, stress and pressure of a separation can take its toll on a business, but there are specially trained professionals who can help. “Speaking to a divorce coach to help navigate the emotional pressures can help restore business focus,” she said.
“Where possible, we advise keeping communication going and amicable. This tends to lend itself to more flexible separation processes. It’s always worth considering alternative methods for discussing finances, such as mediation, or choosing a lawyer who can help you focus on solutions for the family as a whole.”
To read the full article in the February edition of Insider, please click here.
