Mixing Business with Pleasure

25 January 2010

Mixing Business with Pleasure

They say you should never go into business with friends if you want to keep that friendship but what about being in business with your husband or wife?

Sally Pike a specialist family lawyer at Coffin Mew LLP has seen the impact that a divorce can have on the couples business. “Dealing with couples who are also shareholders or partners in a business can add to the complexity of resolving the finances on separation and couples need to take a pragmatic and commercial view to reaching a resolution that will not damage the ongoing viability of the business.”

Sally offers some top tips to couples who are facing not only the stress of a divorce but who are also owner managers of businesses as well.

  • Make sure you have a shareholders agreement or partnership deed drawn up at the start of your involvement in the business. It may be down the list of priorities but it can provide clarity and avoid unnecessary litigation if the business relationship ends.
  • Consider entering into a pre nuptial agreement so that you have agreed what should happen to the business if your relationship fails. They are not yet legally binding but the courts have recently given far more weight to the terms of a pre nup.
  • Make sure if you are thinking of separating that you take accountancy and tax advice at an early stage. There are tax implications depending on when you transfer assets after the date of separation.
  • Make sure you don’t fall foul of employment law if you want your husband or wife to leave the business.
  • Finally remember don’t kill the goose that lays the golden egg. It’s in neither couples financial interest to jeopardize the ongoing profitability of the business. A couple at loggerheads is likely to impact staff morale and prevent the business growing. Consider Mediation and Collaborative Law as alternative ways of resolving any disputes both in relation to the marriage and business.

Please contact Sally Pike on 02380483754 for more information or email sallypike@coffinmew.co.uk