Dividing your assets during divorce can be difficult enough without the added complication of sorting out a shared business. But as increasing numbers of people turn to self-employment, many couples also end up as business partners. When it comes to divorce, deciding what to do about your company can be tricky: do you dissolve it and divide the proceeds; should one of you buy out the other; or will you risk leaving the decision to the court?
When you’ve worked hard to build a business, you may dread the prospect of losing it during separation – but divorce does not necessarily mean the end of your company. Every situation is unique, but here are a few guidelines to help you through dispute resolution when business is involved:
- Start planning: try to step back and consider things from a business point of view. You and your ex are work partners – see if you can set aside your relationship issues temporarily to allow you to work through your business issues. Gather all your company documentation and accounts together and get a full overview of the situation before you start making decisions.
- Familiarise yourself with the divorce process – whether you’re choosing arbitration, mediation, family law or court divorce – speak to your solicitor and find out what to expect when it comes to negotiating your business. If you had a prenuptial agreement or other legal documentation in place when you set up the business, you should have a clear idea of what you are both entitled to. If not, it’s worth sitting down and talking to your ex about each of your expectations.
- Take accurate stock of your business assets. Having your paperwork in order is essential for your solicitor to be able to help you plan your next steps. Make sure your company accounts are up to date and you have clear evidence of what each of you have contributed to the business. Once you have clearly set out your assets and losses, you will be able to move forward with a practical plan.
- Keep the end game in mind – what do you want to come out with when everything is said and done? Do you want to continue running the business and if so, are you able to continue the business without your ex? Or would you rather take your cut and move on? What kind of settlement are you looking for? How would the loss of your business affect your career, your finances and your living situation? Do you have a back-up plan if the worst should happen? These kinds of decisions will depend on whether the business is yours, your ex’s, or in both your names, and your solicitor will be able to help to consider each option based on your circumstances.
- Decide how you want to approach separation. If you and your ex are able to be objective and work through your relationship issues to find a mutually beneficial solution, mediation is an effective option that is often cheaper and faster than court divorce. If you would rather have a decision made on your behalf by a third party but don’t want to go to court, arbitration can be used to settle both business and marital disputes. If you feel that your situation is too far beyond rational discussion, taking your case to court may be the best option, but is likely to result in a longer process and greater expense. Wherever possible, coming to a decision between yourselves – preferably with the help of a mediator or solicitor – will set you up for a better outcome in the long run.
- Don’t assume that your ex will automatically be entitled to 50% of the businesses when you split. A lot depends on your company roles, the length of your marriage, what each of you have invested in the growth and development of the business, and any shares you might hold. Your first step is to establish what your assets are worth and what your liabilities are – from there, you can work with your solicitor to determine your best course of action.
- Keep the lines of communication open. Treat one another as business partners first and foremost when dealing with decisions relating to the company. Avoid snap decisions and acting out of anger. You wouldn’t make a business decision to get ‘one up’ on someone else, so don’t do so just to punish your ex. It’s possible for ex-partners to remain business partners, or at least retain a sense of friendship following separation; learn which battles are worth fighting and when it’s time to walk away.
- Choose an experienced solicitor and use their expertise to get the best outcome possible. Don’t let frustration or bitterness cloud your judgement – running a business is always a risk, but with the right support and advice, you needn’t lose everything you’ve worked for. Look to the future and keep your mind on your business – it may not be the same after separation, but you can use everything you’ve learned along the way to continue your career to an even better place.
- Remember that staying in a broken relationship is detrimental to every aspect of your life: your emotional wellbeing, your health, other relationships, and your career. It might be hard but if you’ve come to the decision to separate, have faith in the fact that you are making improvements to your life and will be better off in the long run.
For practical, down to earth advice on divorce and separation, speak to the friendly solicitors at Frances Lindsay & Co. We offer mediation, arbitration, family law and divorce services with fixed-fee options for every stage of the process to help you stay in control of your budget and plan for the future. Let us take the weight off your shoulders and work together to find the best outcome for your separation – and your business.Tags: divorce advice, divorce and business, divorce solicitor Beaconsfield, divorce solicitor Maidenhead, divorce solicitor Marlow, divorce solicitor Thames Valley, divorce solicitor Windsor