Dividing Assets and Reaching Settlement in Matrimonial Proceedings for Shareholders continued…Pepperells
A blog by Blue Stephenson, Trainee Solicitor in the Family Department at Pepperells Solicitors.
If you are a shareholder in a limited company and are contemplating getting a divorce, you are likely to have questions as to how this might impact upon any financial settlement reached between you and your spouse. Perhaps both you and your spouse are shareholders in the same company and you are concerned as to how you will separate your business ties as well as your marital ones.
Co-Shareholders in Financial Remedy Proceedings
Where both parties to the marriage are also co-shareholders in a business, the Court will often Order that one party’s shares should be transferred to the other as part of the financial settlement so as to prevent the parties being tied into a business relationship post-divorce.
Under section 25A of the Matrimonial Causes Act 1973, the Court are under a duty to consider in every case whether a clean break would be appropriate. In those cases where a clean break is desirable, it is crucial to ensure that the appropriate commercial documentation is drafted such as a Compromise Agreement (where the departing party is employed by the business, perhaps in a directorship capacity) to govern the terms of the party’s departure from the business. Documentation will also need to be drawn up to give effect to the transfer of one party’s shares.
In cases where a clean break is not deemed to be appropriate and both parties will be retaining shares in a limited company, it is vital that a properly negotiated shareholders agreement is drafted to prevent either party from acting improperly and to govern the continuing relationship between the parties in their capacity as shareholders.
Here at Pepperells Solicitors we have a dedicated family team as well as a team of commercial experts who are able to assist with the preparation and implementation of such documentation once a matrimonial settlement has been reached. We are proud to offer a fully comprehensive and all-encompassing range of legal services to address your specific needs and ensure that you are fully protected post-divorce.
Should you wish to arrange an initial consultation then please do not hesitate to contact us via email, telephone, live chat or by visiting one of our six offices in Hull, Scunthorpe, Grimsby, Lincoln, Beverley or Newcastle.