Beware the many pitfalls of divorce
If you, or your spouse, are a company director and you are on the brink of a divorce, you may naturally be concerned about protecting your business from the divorce process:
Is the business an 'asset of the marriage'?
The business can be treated as part of the assets of the marriage in divorce proceedings even if you owned the business before the marriage or your partner was not involved in the business. When considering the finances in a divorce, the court will look at both of your incomes, future earning potential, property, pension and other financial resources available. If you entered into a pre-nuptial agreement before you got married, that will also be taken into account.
Can I transfer assets?
No matter how tempting it may be, DO NOT transfer shares or other assets to fellow shareholders or family members with a view to hiding your assets or minimising the assets available for distribution between you and your partner. The court has the power to set aside any transfer of assets, and moving assets prior to separation can help your partner persuade a court to award them a higher cash settlement.
Does separation affect my tax status?
If you separate just before the end of the tax year, you may both lose your capital gains tax savings. You or your partner will not be able to transfer assets between you within the tax year of separation to save on capital gains tax.
I don't want my spouse to be company secretary anymore
If your spouse is a company secretary, you will need to follow the procedure in the Articles of Association for removing a secretary.
Will I lose my job in the company?
The spouse who is a salaried employee of a company may have employment law claims if they are removed unlawfully from their position.
Taking early legal advice can help you resolve the many concerns you may have about your divorce and the future of the business.
Pearsons & Ward's Juliet Walker has extensive experience in all aspects of relationship breakdown. For advice or to make an appointment, please contact Juliet Walker on 01653 692247