How do you protect your business from heartache?
It’s never a pleasant prospect to consider, but what happens to your business if you split from your partner or die? Finds out how to legally protect your business from heartache.
Women all over the world pioneering their own professional pathways. One in three UK entrepreneurs are female, and 11% of women in USA are running their own businesses – and these trajectories are likely to go up.
However there are legalities to navigate along the journey; whether that is with your customers and clients, with Companies House requirements or employing staff.
Married and in business
Many women who own businesses will seek or should seek to protect their financial positions on entering into the marriage with spouses. This will be through pre-nuptial agreements which are used to do this and give the certainty to both, as to how the finances, shares and business will be arranged in the sad scenario of the marriage ending.
These documents can also make provision for an agreed compensation payment in a situation when a high earning female is likely to give up or reduce down her earnings, as a consequence of decisions made during the marriage, such as having and caring for the children.
The idea is to support the choices made without detriment financially and for many women, it provides comfort to know this when entering into a marriage. Independent advice will be required by each spouse, but this should be a meeting of minds simply paving the way for a bright future.
If and when you are married this can be, and should be, converted to a post-nuptial agreement for added security. However, when children are involved whilst these documents are persuasive, they are not legally binding, as the court will ultimately look at what is in the best interest of the children.
Pre and post-nuptial agreements give you legal certainty
Likewise, if you are married to your business partner a pre-nuptial/post-nuptial agreement as well as a shareholders agreement can give you a transparent platform to build both relationships. These agreements offer you both security as well as reassuring external investors; children and employees.
While having these conversations maybe difficult think of it as a business transaction – it’s a positive contract to develop a relationship, with legal certainty and resolutions set out in the event there are bumps in the road, for everyone’s protection.
Sound business means sound advice and support, so as commercial and family lawyers we have the responsibility of looking out for the business, but more so you as a married business owner, founder and possible parent.
Our commercial team are ladies who know how to give not only clear legal advice but also practical, with the benefit of experience. Your professional legal requirements can be met by ladies who not only know what you will need but have also done it. Business start-up documentation, commercial contracts, workplace policies which are up to date, will all need considering. We can assist with all these aspects and in doing so, give that tailored personal service, that as women, we expect and deserve.
Spliced girls – what happens when you divorce?
The tailoring of legal service by ladies to ladies also extends to your personal life, where potentially the relationship has broken down.
Precisely 62% of opposite-sex divorces in both 2018 and 2019 were petitioned by the wife. Almost three-quarters of same-sex divorces are between women.
The end of marriage is always difficult and the arrangements for children and financial positions can be really hard to navigate. There is not as there once was any truth to the notion of ‘women getting everything’ on divorce and it pays to take advice to know your rights and what to expect.
Just because you have children does not mean your business; the shares or money accumulated is safe with the mum or the principal carer, many factors are considered.
Protecting your loved ones if you die
Taking control of protecting loved ones on death, is also something we recommend. This is from financial planning, trusts for your children and dependents and addressing your Wills. These are all considerations especially as a business owner or those with assets and pensions that need to be considered.
For example, do you want to saddle your children with the business? Should you have cross option insurance to pay the beneficiaries? Or do you want you legacy in business to continue in which case are their mechanisms in place for this?
Whatever your desire and how you want to protect the ones left behind legal documents need to be considered and put in place.
A City Law Firm offers a range of commercial and life services that benefit both sexes.
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