15 May 2012, by Taylor King Family Law Solicitors
Many couples enter into business together for a variety of reasons and when the relationship breaks down dealing with these business assets can be difficult. Often little consideration is given at the outset of the business as to what will happen if the relationship ends.
Entering into a prenuptial or postnuptial agreement could help resolve any possible future problems that may be encountered. Whilst not yet unequivocally binding in the courts of England and Wales such agreements are given considerable weight if they have been entered into freely, with the full appreciation of the consequences and with both parties taking independent legal advice.
However, if no such agreement has been entered into the main issues for the couple to consider are the value of the business and how, following the breakdown of the relationship, it is best owned and managed in the future. It will have to be decided whether the business is split, sold or one party buys the other out.
In order to agree on a valuation for the business it will usually be necessary to jointly instruct an expert independent valuer. This is especially essential if one party claims that they built up the practice alone or made a bigger contribution.
With regard to deciding how the business will be managed it will need some degree of personal discussion which can of course be difficult following the breakdown of personal relations. It will be necessary to consider whether or not it would be possible to work together professionally in the practice together.
The remedies the courts are capable of awarding are far less flexible than an agreement reached amicably. The court could order the sale of the business in appropriate circumstances.
Both parties will receive the best outcome for themselves if the business continues to rum smoothly, differences are resolved and the value of the business preserved. In order to achieve this both parties would need to provide full financial disclosure. The court may order this if necessary.