When business meets personal
Some may say that running a business is like being married. It can be a lot of effort but ultimately hard work will see rewards.
If your business relationship mirrors your personal one and your spouse has an actual interest in the business, for example a shareholding in the company, directorship or employment, then the breakdown of the marriage could have serious consequences for the business itself.
Involving your spouse in the business is an important decision and it should be given the thought it deserves. In our experience many spousal business decisions are made without considering the fall out position, and this is a big mistake.
There needs to be adequate discussion with the relevant professionals about how to structure each partner’s interest and what might be the outcome should the unthinkable happen. If shares are being given then an exit strategy should be planned. A similar process should be implemented for property owned by either individual.
It is likely that the divorce settlement will deal with the treatment of any property and/or shares (or any other interest) in the business and the process will be easier for all concerned if there is a plan in place, no matter how vague, as to what should happen.
Shares held by a spouse may need to be bought out and any transfer will need to be dealt with properly and in accordance with the requirements of the formalities. This will need to be factored in to any settlement to be agreed between the parties.