Addressing a business owned or run by your spouse can be daunting, especially when looking at it from the purpose of divorce proceedings.
Lots of details are required, including who are the directors, shareholders, and what the shareholdings are. The level of income and dividends paid to the spouse involved in the business needs to be looked at. It is easy to get lost in the jargon and blind sighted by the figures of the business. What is in the bank is not always what is available for division, with profit margin being key, not turnover or VAT returns.
Sometimes a valuation of the business is necessary to ascertain whether the cost and risk of pursuing financial proceedings is viable. They are not as expensive as you may think and can be a vital tool.
Not all businesses are transferrable. Sometimes the business is the person and therefore, is no longer a viable business without that person at the forefront running things. If this is the case, the business may have no open market value.
If a share sale has taken place and you suspect that this has been done to defeat financial claims against your spouse when dividing the matrimonial finances, it is important to obtain legal advice as soon as possible.
Under section 37 of the Matrimonial Causes Act 1973 the court can overturn a share sale which was made for the purpose of defeating a financial claim but you must act fast. There is only a 3 year window from the share sale in which the responding spouse must prove that they acted in good faith and without intention; after this 3 year period, it is for you as the applicant to prove the intention of your spouse, which becomes much harder.
A business within divorce should not be ignored. It can provide an income or capital lump sum for the future, or be used to off set against other assets.
For specialist advice and assistance in this subject and all matrimonial matters, book a consultation with us today.