We know business. Like your relationship, you’ve likely invested a lot emotionally and financially into your business. If you’ve found yourself on the verge of divorce or even if you’re happily married, it’s important to take the steps to protect yourself, your employees if you have any, and of course your business. No one begins a marriage with the prospect of divorce in mind; however, when it comes to your future, it is important to be thoughtful and deliberate about business matters and relationships.
You’ve got to start somewhere. For all proceedings, there are five documents you’ll need to prepare before you move forward with any legal action.
Divorce and separation proceedings are never going to be a walk in the park, but we aim to make sure the process is as smooth as possible.
Here are three possible scenarios or solutions:
Transferring your share of other marital assets, such as your house, for your spouse’s equity interest in the business
Sell an equity interest in the business to an outside third party in order to keep it afloat
Share the business with your former spouse
These options may not appeal to you now or even be something you are considering but they may be a better alternative to selling your business outright or liquidating assets.
If you are a business owner and facing divorce, you should seek the experienced professional advice of our Family Law team at Leach Legal. We would be happy to help you explore your options and ultimately achieve Better Outcomes.
STEP ONE: Consider the future of the business
Whilst you may not be able to make a decision now, you will want to take time to consider the future of your business and the three possible outcomes of your separation:
Continue to own the business together
Buy out your ex-spouse’s share of the business (or transfer other assets to them)
Sell the business
STEP TWO: The practical steps
Get a fair valuation- Source a neutral valuation professional to review the worth of your business, focusing on current revenue.
Remove your spouse from the business- If this is possible, it may be more practicable to ease him or her out as soon as possible.
Sacrifice other assets- If your aim is to retain 100 percent ownership of the business by forfeiting other assets instead, such as superannuation, the family’s home or vehicles.
Raise capital by selling a stake- You could sell a minority stake in your business to employees through an employee stock ownership plan.
STEP THREE: Find the right advice
With a team of qualified professionals to help facilitate the process, you won’t have to wade through your separation and asset division alone.
We recommend considering:
An experienced family lawyer
Your financial advisor
When you put your trust in Leach Legal, we will support you and work with you to ensure you are able to think financially, not emotionally.
Elizabeth O’Sullivan is our commercial lawyer and she has been acting for both buyers and sellers of businesses for over 20 years. She works with leading Perth business brokers to facilitate the settlement of business sales and is able to advise on ancillary matters, such as leases and buy/sell agreements.