4 tips for dealing with your business during separation

Knowing how to deal with entities, corporate structures and businesses when you are going through a separation can be tricky. 

At Bespoke Family Lawyers, one of our greatest passions is to help you navigate your separation by getting into the nitty gritty details of complex property and financial matters.  

We’ll help you explore and answer crucial questions, such as:

• How many entities are there involved in the business? 
• Who are the directors and shareholders? 
• Is there a Trust? 
• Who are the trustees? 
• What services or functions does the business perform?  
• Are there any loans, tax debts or Division 7A issues? 

If you’ve got a business that needs to be factored into your separation, here are a few simple points worth keeping in mind when you are beginning negotiations with your partner:

1. Get a valuation of your business or entity.  
   This is the best way to discover the true value of your business and ensure that it is correctly taken into account in your property settlement. If a valuation is too costly, then you may be able to have your accountant provide you with an estimated value to assist with preliminary planning and strategising.
2. Ensure that you are including the business in the property pool. 
   Even if you do not think your business is worth very much, there will be something there that will need to be taken into account. This could be the assets or the equipment that the business holds, or any business loans associated with the entities.
3. Don’t double count your business assets. 
   If you take into account a valuation, or estimated value, for your business in your property pool, then ordinarily this includes the entirety of the business assets, bank accounts, equipment, liabilities and any other resources. 
   
   We have found that people will often attempt to provide a value for the business bank accounts and liabilities in the property pool, in addition to the overall value for the business.
   
   This can lead to a situation where you are double counting certain assets and liabilities, which means that you are using an incorrect property pool and the division of your assets could be skewed or unequal.
4. Ensure all documents reflect your agreement.
   Once you have reached agreement with your Ex as to who is to retain the business or a certain entity, take the time to go through the steps of removing the other party from all relevant roles and documents. 
   
   For example, ensure that they resign as a director of any entity the other party is retaining and transfer any shares in their name to the other party, or that they resign as a trustee and are removed as a beneficiary of any relevant trust. 
   
   This also means you may need to unravel the liabilities and the other person’s role as a guarantor or borrower. This will ensure that you can give full effect to any agreement reached and the financial intertwining of your relationship can come to an end.

We hope that the above four considerations help as you start thinking about how you are going to deal with your business as part of your separation.

We also offer a free 30 minute CLARITY CALL to get you started on the pathway to a resolution. Contact us if you want further guidance around your business and separation.  We would love to help you move forward. 

***Disclaimer***

This article is for general information purposes only and does not constitute legal advice or any other professional advice.