16 May, 2012
It is unlikely that you would be thinking about your business assets when you recite your Wedding Vows, but your spouse may certainly be thinking about them should the marriage sadly come to an end. There is now hardly any distinction between the breadwinner and the homemaker, both are considered to have made similar contributions to the family wealth. The length of the marriage would determine the scale of the settlement, and no longer can an entrepreneur defend a claim by saying if their spouse took the assets out of the business, the business could "go bust." In many cases, business owners should be able to re-finance to keep their business afloat, although in difficult economic conditions it could prove tougher to secure that borrowing.
When you divorce, your business assets are up for grabs as much as your home, car and holiday cottage. You might expect this if you have both played an equal part in the business, but the principal is the same if your spouse never worked.
Many entrepreneurs give the impression that their business is much more successful than it really is, or has much lower borrowing. Spouses are understandably suspicious when they are suddenly told the business is struggling financially, and this can lead to nasty disputes. A common sticking point is how to value the business, valuers can give very different figures and this in its self can be a very costly exercise.
With the knowledge therefore that your spouse may never have even set foot on your business premises, but on divorce could claim a part of its assets, the best way of protecting yourself against such circumstances is to enter into a pre-nuptial agreement. Although these are not yet binding in English Law, recent case law has proven that if executed in the right set of circumstances, they may well have some weight in the event of separation. Seeking assistance from a Solicitor at the outset to get advice tailored to your specific circumstances is the best way of protecting your business assets.