Protecting your company during a business partner's divorce
Published 19 Sep 2017
Even if you aren't going through it yourself, divorce is ugly. This is especially true when the divorcee in question is your business partner - what will the split mean for your company? Will your partner's ex-spouse have some say in the procedures moving forward? Will the financial toll of the split lead to bankruptcy of the entire business?
These are all fair questions, and it makes sense to work with a Parramatta lawyer to divorce-proof your organisation - whether it's you who is married or your business partner - in case the worst should happen.
When is (and isn't) a business up for grabs during a divorce?
A business is technically considered to be property, or an asset - for that reason, timing is important. Like a pre-owned house or family heirloom, a company that was created or inherited before the marriage is unlikely to be split during the divorce. If the business was a 'gift' from a third party, it will also probably not be affected.
However, if the company was created during the marriage, things might be more complicated. Unless the initial business contract stipulated what would happen in the event of a divorce, there's a chance your partner's ex-spouse could make a claim during the proceedings.
Is my share of the business in jeopardy if my business partner is divorcing?
Luckily, the chances of the ex-spouse being able to influence your half of the business are unlikely. However, they might all of a sudden have a say in the everyday running of the organisation, which could potentially be both a nuisance to you and a detriment to the success of the business.
The best way to prevent this from happening, of course, is to either sign a prenuptial agreement (this goes for both business partners) or include a clause in the original contract concerning ownership. If you've found yourself in a situation where such measures are not already in place, it is important to seek legal help.
The Parramatta Family Court is the ultimate deciding authority when it comes to property division, it pays to have an experienced family lawyer on your side to help make the process as smooth and successful as possible. At Malouf Solicitors, our team of qualified lawyers is happy to assist you - get in touch with us today for more information.
Please call us on 02 8833 2000 to speak with a lawyer
Dear Anthony & Kym. Thank you for all your help and support in our matter. It is a big relief to us that it is over. Please also thank your staff, Myla and Lina etc for all their help. It has been a pleasure working with you all, the subject matter notwithstanding. With best wishes and regards,
Nick of Parramatta