Divorce is never going to be a simple process. When a family business in involved, it invariably becomes quite messy.
If you are the person considering leaving the relationship, then you should take steps in preparation for doing so. The earlier you can see a Family Lawyer the better as they will be able to alert you to considerations which may not have even crossed your mind to avoid negative impacts on the business including disruption to operations, marketing issues, banking issues, staffing and so on.
If you and your partner run the business together here are some practical suggestions if you decide you would like to keep the business.
Understand your duties and obligations
Don’t assume that you are exempt from your duties and obligations as a director and/or employer simply because your relationship has broken down. There may be aspects of your relationship breakdown that cross over into Employment Law and Corporate Law. We are specialised in understanding the legal impacts of relationship separation on these aspects of a business.
Protect your intellectual property
Make sure you protect your intellectual property, your online accounts and your social media accounts. You should make sure you know and change all relevant passwords if necessary. Be careful about inflaming a situation unnecessarily but protect your interests.
Your partner's role
Make sure you understand your partner’s role in the business and can either do it yourself or can easily hire someone to take over.
Communicating your intentions
Consider the setting in which you tell your partner of your intention to separate. If the news is going to come as a surprise, or it is not obvious that you should be the one retaining the business we suggest that you do this with the assistance of a third party such as a family counsellor.
Consider financial protection
Ensure that funds cannot be removed from the business with your consent or social media accounts controlled by your partner who may be emotionally unstable at least initially.
What if my partner is keeping the business?
If you accept that it should be your partner who retains the business then you should ensure that the business is capable of continuing without your input. You do not want there to be a decrease in the value of the business as a result of you no longer being involved in its running.
Long Term Implications
Once the initial arrangements have been made you will need to consider the longer term implications of your separation. It is likely that the business will form a considerable amount of your joint wealth and agreement will need to be reached about its exact value. If necessary a formal instruction to a valuer may need to be undertaken. There are various ways a business can be valued and you should seek advice if you wish to challenge the valuation.
How Can We Help?
If you need assistance during a separation or want to know more about the impact a family business can have in Family Law proceedings, please contact us today on 02 4952 3901 or email email@example.com for a 15 minute free consultation with one of our estate planning solicitors.