Legal Question about Marriage and 'Assets'

linzz_2

Not sure where to post this question so hope it's in the right place and that someone with legal knowledge can help me!

My partner has taken on a new business partner. We are (were) planning on getting married next year, had chosen the venue and everything, just had to set the date when this weekend he announced a bit of a bombshell; he is worried that his business partner gets married to his girlfriend at some point (even they have no plans to) then they get divorced and she will be entitled to half of his business partner's share of their business! So because he doesn't trust her, he wants something written into their business agreement to say if either of them get married their wife to be has to sign a pre nup to say if they ever get divorced they will have no claim on the business. I still can't believe that he thought I would sign this! He just keeps saying it's not me he doesn't trust it's her and he can't ask them to do it if we don't!! And think with my head not my heart. But I say it's the principle and I can't help thinking with my heart as it's not 'business' cont...

linzz_2

... ran out of space!! I have told him I would rather not get married than sign a pre nup!

My question is is he right to think as a wife you are entitled to half of everything, business included and if so is there not another way round this?! Or am I just being silly not to sign a pre nup?

We have been together 6 years (known eachother for 21 years) and have two children. His business partner has been with his girlfriend for 2 - 3 years and have no children (he has 3 from previous relationships)

Any help/advice would be fantastic as it's all been whirling round in my head all weekend!

brazilianwax

Pre-nups aren't legal in this country anyway, so I don't see that that could be a solution to the issue.

I don't know enough about the other issues to be able to advise, but I'm sure someone that does will be along shortly.

Bean_Counter

I agree with Brazilianwax, that pre-nups are not legally binding in the UK.

It is fairly standard in partnership / shareholder agreements to have a restriction on who shares can be sold to. For example, agreements usually say that shares have to be offered to existing shareholders first.

I see no reason why the business partners can't place something along these lines (or whatever they want) into their agreement.

Have you checked the existing agreement to see if there is anything there already?

linzz_2

Bean_Counter wrote: »

I agree with Brazilianwax, that pre-nups are not legally binding in the UK.

It is fairly standard in partnership / shareholder agreements to have a restriction on who shares can be sold to. For example, agreements usually say that shares have to be offered to existing shareholders first.

I see no reason why the business partners can't place something along these lines (or whatever they want) into their agreement.

Have you checked the existing agreement to see if there is anything there already?

Thanks for your replies, I have pressed both your 'thanks' buttons but they are not working? Think computer is on it's way out again!

I didn't make it clear in my first post, he only has one partner (he was partners with his Dad but he has now retired) He and his new business partner have only been together for a few months and have no agreement as yet.

I hadn't really thought about it and found it a little hard to believe that a wife would be entitled to half of their husband's share in a business even if they had nothing to do with it!

Bean_Counter

linzz wrote: »

Thanks for your replies, I have pressed both your 'thanks' buttons but they are not working? Think computer is on it's way out again!

I didn't make it clear in my first post, he only has one partner (he was partners with his Dad but he has now retired) He and his new business partner have only been together for a few months and have no agreement as yet.

I hadn't really thought about it and found it a little hard to believe that a wife would be entitled to half of their husband's share in a business even if they had nothing to do with it!

I would think that it would be a good idea to have a partnership agreement. This is pretty standard practice. How do they decide on profit split, rules for new partners starting / leaving / retiring, etc etc.

paddy's_mum

When a very similar situation happened to me (in a relatively amicable divorce in which I was the claiming wife) our solicitors simply allocated a sum of money to cover the value of my input to my husband's business. My husband paid that sum to me as part of our financial settlement and at no time was the business itself threatened in any way. I was simply recompensed for my contributions to that business over many years.

It would, in any case, be extremely foolish for any wife to claim physical assets or shareholdings from a firm (unless we're talking BP or some huge company with assets running into billions) if by so doing, it helped to damage or destroy that business. If, say, I had been receiving maintenance for small children from the profits of that business, and my claims killed it, where was the maintenance money to come from?

I think your life partner and his business partner need to consult an experienced solicitor and get this sorted out properly very soon. Good luck.

linzz_2

paddy's_mum wrote: »

When a very similar situation happened to me (in a relatively amicable divorce in which I was the claiming wife) our solicitors simply allocated a sum of money to cover the value of my input to my husband's business. My husband paid that sum to me as part of our financial settlement and at no time was the business itself threatened in any way. I was simply recompensed for my contributions to that business over many years.

It would, in any case, be extremely foolish for any wife to claim physical assets or shareholdings from a firm (unless we're talking BP or some huge company with assets running into billions) if by so doing, it helped to damage or destroy that business. If, say, I had been receiving maintenance for small children from the profits of that business, and my claims killed it, where was the maintenance money to come from?

I think your life partner and his business partner need to consult an experienced solicitor and get this sorted out properly very soon. Good luck.

This makes sense to me regarding actual amount of assets an ex-wife would be entitled to. My partner was worried that if things were not so amicable she might go for everything she could get!

It is not a big business, only the two of them and one employee!! But it is growing. They are going to sort a business agreement, just haven't had time yet.

He seems to have changed his mind since reading this thread so looks like the wedding's still on!

pinkshoes

I thought they changed the laws about couples cohabiting? So if you already live with this guy, and have 2 kids together, you should have pretty much the same rights as if you were married to him?!?!

Me and my OH (not married, no kids) have a "pre-nup" contract between us that we wrote ourselves on what would happen with our house if we split up, because we decided it was best to consider all the possibilities whilst all was calm!! I'm not planning on splitting up with him, but if it ever came to it, we already have written down what happens, which we both agreed to.

Ystrad_Lad

You should get legal advice.

If your partner's business is constituted as a Partnership or Limited Liability Partnership then a divorcing spouse would have a claim on part of the business. As has been mentioned, it would then be up to the business partner concerned to buy his spouse out.

If he can't afford to do that, the business could be put in jeopardy.

If it is a limited company, the divorcing spouse would only have a claim on the shares held by her husband.

Bean_Counter

pinkshoes wrote: »

I thought they changed the laws about couples cohabiting? So if you already live with this guy, and have 2 kids together, you should have pretty much the same rights as if you were married to him?!?!

Me and my OH (not married, no kids) have a "pre-nup" contract between us that we wrote ourselves on what would happen with our house if we split up, because we decided it was best to consider all the possibilities whilst all was calm!! I'm not planning on splitting up with him, but if it ever came to it, we already have written down what happens, which we both agreed to.

I might be wrong, but I don't think the law has changed as much as you might think. I have attached a link to a BBC article written fairly recently stating that in the absence of a will, you might not be covered. I'm sure that there are other articles out there that will cover the same subject.

It appears that a will may still be required.

http://news.bbc.co.uk/1/hi/business/6423981.stm