What happens to my business when we separate?

Small businesses and family law disputes

The reality of family law disputes is that many parties have one or more small businesses that they were running during the relationship and intend to continue running after the relationship.

The two main issues that tend to arise in family law matters are:

  1. How much is the business worth and is it available to be split; and
  2. When parties have jointly been running the business and need to disentangle themselves.
Is the business available to split?

In Family Law matters, all assets and liabilities of the relationship are open to be included in an asset pool and to be split between the parties. The law refers to this as altering the interests of the parties in the property. This is the case for both married and de facto matters. Of course, there are arguments for why various assets and liabilities should not be included in the asset pool, but those are on a case by case basis.

A small business where either one or both parties are the only proprietors, even if the business is managed through a family trust, usually falls squarely and completely in the asset pool available to be split.

A small business managed as a partnership with other persons, or where it is set up as a proprietary limited company where shares of the business are owned by persons outside of the relationship, still usually falls within the asset pool but only to the value of the share of the party in the marriage or de facto relationship.

The business is often retained by one party of the relationship and added to their side of the asset pool, rather than necessarily having to be sold. This means it is important to have a value for the business as that value may impact on the split of the other assets where one party might need more cash assets to make up for not retaining the business.

How much is the business worth?

In a dispute, a small business can be and should be professionally valued by a joint sworn expert who undertakes business valuations for Family Law matters. At Ebejer & Associates, we can work with valuers to get an accurate valuation for negotiation purposes or to use in Court.

The reality of a small business is that parties often get stuck looking at only the assets held by the business or the cash in the accounts of the business, and forget that various liabilities (including tax) need to be taken into account. Parties often also have to come to terms with understanding that a small business value is intrinsically tied to one or both of the parties and that if the business was to be sold without those key persons then the business will be worth much less. These are examples of some of the considerations that a professional valuer will take into account, and the information that needs to be provided to the valuer to ensure an accurate value.

Parties can agree to ascribe a value to the business, and that can be nominal or nil.

Disentangling from the business

Often when small businesses are run by married or de facto parties both parties end up being directors of the business and where there is a family trust they are both beneficiaries.

Either one or both parties often use the business bank accounts for personal expenses.

There can also be tax issues with unpaid tax for either personal tax or business tax which need to be resolved before finalizing property matters.

At Ebejer & Associates we have experience in resolving the above issues for our clients and working with accountants to ensure that parties have undertaken the necessary steps to finalise their relationship and move forward with their new future.

If you need specific advice regarding your small businesses and family law dispute contact our team on 03 9741 1722 or via email at reception@ebejerlawyers.com.au

Our legal services

Our lawyers provide expert assistance and advice in the following areas:

Family Law

  • Parenting and Property Matters
  • De Facto Separation 
  • Divorce 
  • Binding Financial Agreements 

Wills & Powers of Attorney

  • Wills 
  • Enduring and Non-Enduring Power of Attorney
  • Medical Treatment Decision Maker 
  • Guardianship Applications at VCAT

Deceased Estates, Estate Planning and Probate

  • Grant of Probate
  • Letters of Administration 
  • Contesting Wills 
  • Calling in and Distributing Assets from deceased estates

Conveyancing

  • Purchase 
  • Sale 
  • Transfer of Titles 
  • Caveats 

Intervention Orders

  • Family Violence Intervention Orders
  • Personal Safety Intervention Orders 
  • Representation at Court
  • Advice and assistance contesting an Intervention Order

Commercial & Residential Leases

  • Drafting Leases 
  • Advice and Review of lease documents
  • Disputes as to rental relief
  • Representation at VCAT

Client testimonials

Hi. Thanks so much for all your hard work and efficiency. Please thank Marlene for me also for all her hard work and for a great outcome. Hope you both have a great Christmas and all the very best for 2018. Thanks and best wishes.

Brett

Marlene was recommended to me by a friend and thank God she did. Couldn’t have chosen a better person for the job. At a time when I felt my life was spiraling out of control, Marlene’s knowledge, dedication and positive attitude turned one of the worst experiences in my life into a bright future for myself and children with better than expected results. Her professional, friendly manner made dealing with such a deeply emotional issue just that little bit easy, and I would often walk out of her office with a smile. I cannot thank her enough. I would have no hesitation in highly recommending Marlene Ebejer to represent you as your legal representative.

Patricia

I’ve been a client of Ebejer & Associates since 2007, and have used them for all of my legal needs. Marlene and her team are responsive, informative and immensely helpful and supportive. I’ve always felt that my interests have been 100% supported, and there have certainly been occasions where the team has gone above and beyond for me. I cannot recommend Ebejer & Associates highly enough.

Shannyn

I cannot thank both Marlene and you enough for everything you’ve done. You both made everything so easy and there was no stress. Thank you and wishing you both a wonderful Christmas and fabulous New Year.

Megan

Accreditations & Memberships

Ebejer & Associates Lawyers are a proud supporter of Cancer Council Victoria’s Financial and Legal Support Program, providing legal support to vulnerable Victorians affected by cancer. If you, or someone you know, has cancer and needs support, learn about the services available at www.cancervic.org.au

Proudly Supporting Cancer Council Victoria

Ebejer & Associates Lawyers acknowledges the Traditional Owners of the regions we service, their diversity, histories and knowledge and their continuing connections to land, water and community. We pay our respects to all Aboriginal and Torres Strait Islander Peoples, their Elders past, present and emerging.

Ebejer & Associates Lawyers

6/19 Synnot Street, Werribee, 3030
Monday – Friday / 9am – 5pm

Suite 7.12, 365 Little Collins Street, Melbourne, 3000
By appointment only

Bellarine Peninsula
By appointment only

PO Box 171, Portarlington, VIC, 3223

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