{"id":999,"date":"2018-07-03T13:07:11","date_gmt":"2018-07-03T13:07:11","guid":{"rendered":"https:\/\/wembleysolicitors.com\/blog\/?p=999"},"modified":"2018-10-05T13:08:49","modified_gmt":"2018-10-05T13:08:49","slug":"what-happens-to-a-family-business-after-divorce","status":"publish","type":"post","link":"https:\/\/wembleysolicitors.com\/blog\/what-happens-to-a-family-business-after-divorce\/","title":{"rendered":"What Happens to a Family Business After Divorce?"},"content":{"rendered":"

When you\u2019re planning out your new business venture with your spouse, you\u2019re not thinking of its repercussions in case you decide to part ways as a couple.<\/p>\n

But things don\u2019t always work out as we want them to, and in the case of a potential divorce, what will happen to the business becomes a pressing concern.<\/p>\n

While keeping the professional world of your business out of your personal life may be possible for some couples, at times, the differences are too huge for joint ownership and participation to be practical.<\/p>\n

Is a Business an Asset?<\/b><\/strong><\/h3>\n

According to UK laws, a business falls under assets. However, it is rarely as simple as that when it comes to divorce. The court must first classify whether the business is considered marital property or community proper, to do which a number of factors are evaluated.<\/p>\n

These factors can include, but are not limited to, the nature of funds used at the outset of the business, each party\u2019s contribution the business, which party will be better equipped to handling the business post-divorce and the value of the business at the time of inception and at the time of divorce.<\/p>\n

If both parties pooled in their resources to run the business, the business will then be considered marital property. It may be considered personal separate property if both parties do not share an equal part in the business. Knowing what category your business falls under could help with the legal proceedings.<\/p>\n

\"\"<\/p>\n

Valuing the business<\/b><\/strong><\/h3>\n

The next step the court may take after categorising your business would be to value your business. Having your business appraised by a professional appraiser can give you the most accurate value for your business.<\/p>\n

The courts will ultimately make a decision based on the final value of the business. In cases where the individual contribution is blurry, courts may award a higher percentage of other assets to the non-owner of the business and hand the business over to the legal owner.<\/p>\n

Final Decision<\/b><\/strong><\/h3>\n

Though the court has the power to shut down your family business, it will rarely do so. It is also rare for a non-participating spouse to get shares in a business as part of the divorce. You and your spouse may agree on one party paying the other to buy out their shares of the business.<\/p>\n

Alternatively, if relationships have not soured enough, you two may be able to continue co-owning the business. However, for this to be successful, it is important that both parties be on civil terms with each other.<\/p>\n

Getting Legal Advice<\/b><\/strong><\/h3>\n

It is almost always advisable to reach a settlement between both parties without resorting to taking the issue to Court. But if for any reason, a negotiation is not in the cards, get a family solicitor to give you specified legal advice to ensure you\u2019re covering all bases before going to court may be a good idea.<\/p>\n

Wembley Solicitors<\/u><\/a>, a UK based legal consultancy firm, offers highly-trained and professional family solicitors\u00a0to give you legal advice on all matters pertaining to your divorce.<\/p>\n","protected":false},"excerpt":{"rendered":"

When you\u2019re planning out your new business venture with your spouse, you\u2019re not thinking of its repercussions in case you decide to part ways as a couple. 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