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For many of us, the past year has been a make-or-break time in our relationships. Never before have we been so on-top of our other halves, not only spending evenings and weekends together, but working from opposites sides of the same makeshift office-cum-dining table on a daily basis. For some it’s been a joyful time to get to know their partner in another situation; and for some it has pushed them to the brink.
But for others, this is the norm and always has been.
In the year before the Covid-19 pandemic hit, there were more than 5 million family businesses in the UK, accounting for more than a third of the UK’s GDP. With the pandemic providing the opportunity for many more home-grown businesses to get off the ground, this is likely to have increased considerably. But a business born at home, needs to have more protection in place than many others, as the very nature of a family business relies on the strength of the family.
In the sad eventuality of a marriage failing, there are often hard feelings which can then impact on the running of a business. The last thing many couples want to do is to continue to work together. But what are then the options for each party? Every case is different, but it is universally true than any value of a family-owned business will be taken into consideration when agreeing a divorce settlement. If both parties own equal shares, no matter who has done “more of the legwork”, then the value and income generated would be considered a joint profit.
Even if a business is not conventionally a family business, the corporate structure may tell a different story. An accountant may advise that making your spouse a partner in the business is beneficial for tax minimisation, but this could lead to problems in the future if the marriage ends.
It is important therefore to think about business assets at the start of a relationship and to consider what may happen in the future, in order to keep both the business safe and any separation proceedings as straightforward as possible should things not work out as planned.
