DIVORCE AND FAMILY LAW FOR BUSINESS OWNERS IN CHATSWOOD
Our Lawyers Can Help You Divide Your Assets, Including Your Business
One of the most difficult aspects of any divorce is the division of assets. However, the already complicated process becomes even more so when there is a business involved. A business is considered a marital asset and, as such, needs to be divided equally amongst the divorcing parties.
While this may seem simple in concept, valuing a business and then equally distributing shares is anything but simple when you take into consideration the value of the equipment, accounts receivable, accounts payable, third-party ownership and dozens of other factors.
At Chatswood Family Lawyers, we cannot promise that your divorce will be easy, but we can promise that our lawyers will provide the unwavering guidance and support you need to make it through the process as quickly and painlessly as possible.
Get in touch with us today to see how we can best help you on your matter.
WHEN ONE SPOUSE OWNS THE BUSINESS
It is much more common for the business in question to be owned by one spouse and not both. However, that doesn’t make matters any less complicated. In this scenario, the question turns from “What do business ethics dictate?” to “What constitutes marital property?” For instance, if one spouse spent the majority of the marriage building a multi-million dollar empire, should the other spouse be entitled to a percentage of the shares? And if so, how much?
Australia is an equitable distribution country, meaning that marital property does not necessarily have to be divided equally; it just needs to be divided fairly. In the case of the business, the judge will consider how much of a role, if any, the non-owner played in making business ownership a possibility.
For instance, if the non-owner helped run the books and took care of the children while the business owner put in late nights, weekends, and early mornings and contributed part of his or her income to get the business off the ground, the judge might award ample share of the business to them. On the other hand, if the non-owner had no role in the business’s success whatsoever, the judge might see no reason to grant them any share.
With that in mind, the judge is not likely to grant the other spouse partial ownership; rather, they will have the business valued and order the spouse-owner to pay the other spouse his or her due share.
It is also important to keep in mind that just because the spouse-owner had ownership of the business prior to getting married does not mean that the business is not marital property. Marital property is considered any income sources that contributes to the family’s expenses, which is what a business provides.
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WHAT IF YOU’RE SEPARATED IN A DE FACTO RELATIONSHIP?
In Australia, the division of property for de facto couples, including business interests, is treated similarly to that of married couples under the Family Law Act. Business assets are considered part of the property pool and may be subject to division.
To determine whether your relationship qualifies as a de facto relationship, the court will consider whether you and your partner lived together on a genuine domestic basis. Even if you’ve been living apart, certain circumstances—such as the length of your relationship or financial interdependence—may still establish a de facto relationship under the law.
If you’re unsure how your business or other assets might be divided following the end of a de facto relationship, Chatswood Family Lawyers can provide clear, expert guidance.
HOW TO PROTECT YOUR BUSINESS AFTER A SEPARATION
If you own a business and are in a relationship, it’s essential to take proactive steps to safeguard your business interests in the event of a separation. At Chatswood Family Lawyers, we recommend seeking advice from our experienced family lawyers, especially if you’re considering starting a business while in a relationship.
One of the most effective ways to protect your business is by entering into a Binding Financial Agreement (BFA). A BFA allows you and your partner to outline how property, including business assets, will be divided in the event of a separation. This can provide clarity and reduce conflict, ensuring your business remains secure.
Additionally, if you’re part of a business with other stakeholders, consider incorporating agreements that require any co-owners entering marriage or de facto relationships to establish pre-nuptial agreements. These agreements can help prevent future claims by partners who are not directly involved in the business, protecting its operations and value.
PROTECT YOUR BUSINESS AT ALL COSTS WITH CHATSWOOD FAMLY LAWYERS
If you want to file in the family court or already have, and if you are unsure of what is to become of the family business, reach out to our family lawyers at Chatswood Family Lawyers for advice and aggressive legal representation. We will help you achieve an equitable resolution that is in the best interests of you and your loved ones.
To speak with a knowledgeable and experienced accredited specialist family lawyer, contact us today online, by email at enquiries@chatswoodfamilylawyers.com.au or by phone at (02) 9412 4500 to set up a consultation.
We can meet with you at our office or discuss your case over the phone. Our firm prides itself on accessibility and making certain to help each and every client in a timely manner.