Starting a business during divorce proceedings
Couples often separate long before the decision to divorce is made. Or, due to various disputes, divorce proceedings take up many months or even years. You cannot be expected to put your life on hold during that time – indeed it could be argued that to secure the future of you and your children, it is vital to take pro-active steps to achieve your ambitions.
However, if you do start a business during divorce proceedings, you must take steps to ensure it does not become part of the financial settlement. At RVS Solicitors, our team of family law Solicitors, led by Rakhi Singal, have the legal knowledge and experience to advise those planning to start a business during divorce proceedings.
How RVS Solicitors Can Protect Your Business Goals Through Divorce
At RVS Solicitors, we understand commercial realities and can provide smart, practical advice on pursuing setting up a business whilst your divorce is going through. To help keep costs down, we run a paperless office and provide video conferencing facilities, saving you time from having to come into our office to speak to us. In addition, all our clients have access to our client portal, allowing them to keep up to date with how their matter is progressing.
We’ve taken steps that reduce our operating costs whilst modernising our approach, and we are passing on the savings to you.
Frequently Asked Questions (FAQS)
Can a business or other asset acquired post-separation be included in the financial settlement?
Financial Orders cannot be made until divorce proceedings are at least half-way through. Therefore, if you and your spouse decided to wait two years before divorcing so as to avoid blaming one another for adultery or unreasonable behaviour, this leaves plenty of time for one party’s financial situation to improve; or for a business to be launched. If this happens, the non-business owning spouse may argue that it is unfair not to take the business and its assets into consideration when making a Financial Order.
How will the Court decide on whether to include a post-separation business in the Financial Order?
The key determinant as to whether a new business will be included in a Financial Order is whether the needs of both spouses can be met without having to resort to sharing assets acquired post-separation. This decision will be made by examining the factors set out in section 25 of the Matrimonial Causes Act 1973. If the needs cannot be met with assets from the marriage, then the post-separation business and its assets can be shared.
How can I protect my new business from a divorce financial settlement?
The most robust way of protecting your fledgling business started post-separation is to draw up a Separation Agreement. This will set out how a couple’s finances will be ultimately divided and can specifically exclude one spouses claim to a new business venture.
Although not legally binding, a Separation Agreement, where both parties have received independent legal advice, will carry strong weight with the Court.
Rakhi and her team can advise on and draft a comprehensive Separation Agreement which can protect your commercial interests.