Running a small business can create stress and conflict. Owners understand that to succeed they need to adapt, and this can require a significant change in attitude. The unfortunate reality is that for some couples this can create tension and lead to the breakdown of their relationship. When considering the assets of the parties, the Family Law Act will include your business interests.
The Family Law Act has strict financial disclosure provisions that require the parties to provide access to business records to assist with determining the value of the business.
Whether it is a partnership arrangement, corporate entity or trust, the business will need to be valued and disclosure given, but the ultimate value will depend on the financial statements of the business.
Aside from the toll the separation takes on the business owner, their immediate concern will be the continued success of the business. It follows that if the separation is acrimonious, parties ought to be vigilant to ensure the goodwill and financial security of the business is not diluted by the actions of the other party.
We recommend all entities operating a business prepare appropriate agreements that include a formula to determine the value of the business and the actions to occur in certain circumstances.
Get in touch with us to discuss how we can assist with the drafting of the appropriate documents to safeguard your business against potential disruption. In addition, we are well placed to advise you on your rights and obligations under the Family Law Act.
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