The relationship between business partners is an incredibly important one – running a business with someone requires a significant level of trust, as the stakes can be high, particularly in terms of finances.
As a partner in a business, often one of the greatest concerns when going through a divorce is how best to protect your business partner’s share from being included within the matrimonial pot for distribution with your spouse. This is particularly relevant where there is no express partnership agreement confirming the terms on which the business assets are held, or how exactly the income from the business is to be shared. For example, if children naturally fall into business with their parents, perhaps with one or two of their siblings, and potentially their siblings’ spouses as well, there may never have been an express agreement as to how the partnership is owned. Even where there is an express agreement, business decisions can be made which muddy the waters.
In such circumstances, it can be necessary for your business partner to defend their interest. One way to do this is to apply to the Court for them to be joined to proceedings as an intervenor. Your business partner will need their own legal advice and representation, but, as an intervenor, they will have a platform from which they are able to assert their interest and protect their share of the business.
In general, the Court will want to ensure that the interest of any third party has been ascertained before the matrimonial issues are considered. As such, it is likely that the Court will list an additional hearing, or two, to deal with the discrete issue of your business partner’s interest, before the matrimonial proceedings can be dealt with in the usual way. It is likely that the partnership accounts will need to be disclosed and reviewed, as the Court may rely on the accounts as the best evidence as to how the business partners intended that the business be owned.
If you are concerned about how your divorce may impact your business partners, it is important that you seek legal advice as soon as possible.