The whole process of divorce is hard to get done without a hitch. Arguably the trickiest part of separating is splitting up the assets. When there’s a house, car and numerous appliances to divide up, there can be a little more wrangling than expected, but what happens when you throw a family business into the mix.
Marrying into a family can sometimes (voluntarily) involve becoming a partner, shareholder or employee of a family business. If so, divorce may mean leaving the business one way or another, which is usually for the best.
If you’re an employee divorcing someone who runs a family business, all leaving would involve is handing your notice in. For divorcees with a stake in the business who want to leave with their fair share of the company’s assets, this is where it gets complicated.
Going to the Courts
Statistics suggest that 42% of marriages end in divorce, so it’s a perfectly normal thing to do. Divorcees looking to leave a family business must know:
- How much the business is worth and how profitable it is
- What percentage of the business they own
- What the procedure is for leaving the business
Getting a valuation of the business is a must, as is a look at any paperwork with proof of part-ownership. To ensure a seamless transition during divorce, others involved in the affected family business should be contacted first. Then, legal proceedings can begin.
The first step is to seek legal advice. Family law solicitors such as Withers Worldwide are ideal for divorce law support. Next, you need to know what the divorcee wants – make sure it’s a fair amount reflecting their input into the business.
If it reaches the courts, it must go through family courts rather than business courts, as the main issue is family breakdown. As it’s a family matter, these courts are the best place for such disputes.
Among the 4.7 million family-owned businesses in the UK, a handful of them will have experienced issues pertaining to divorce. Make sure that everyone gets their share of the business post-divorce, be it in private meetings or in the courts.
The business needs to have someone in place to take over the role of the departing divorcee, whilst the divorcee themselves will have to move on. A succession plan is the best way of ensuring a family business runs smoothly – this should detail who takes the place of anyone who leaves the family business, irrespective of their reason for doing so.