Protect your limited company on a divorce
Advice

How to protect your limited company on a divorce

Wendy Campbell Wendy Campbell
2 min read
This blog is more than 10 years old

Businesses, including shares held in a limited company, form part of the assets to be distributed on divorce. They are a central part of financial proceedings and discussions when a divorce takes place.

It could happen to your company. You could be the main shareholder. Your business and your company could be adversely affected by the consequences of a divorce.

How do you go about protecting your limited company when a divorce takes place?

  1. You could enter into a Prenuptial Agreement prior to the marriage. Although prenups are not yet legally binding in court, during the last five years they have been given increasing weight by the courts provided that the guidelines laid down in the higher court cases are followed. You could specifically exclude your limited company and your business from any claims by your spouse. Provided that the guidelines set out in the higher court cases are followed you may be able to protect your business.
  2. If you are already married then, with the agreement of your spouse, you could enter into a Postnuptial Agreement, protecting the business including the limited company from claims by your spouse.
  3. If you wish to protect your business from claims by your spouse then it is important that you do not appoint your husband or wife as a Director in the business or give them any shares in the business as it would be much easier for them to claim a share in the company following the divorce.
  4. Do not secure the matrimonial home against company debts as this would increase the likelihood of your spouse making a successful claim against the business.

Although legally you and the limited company are regarded as separate entities, this does not stop the court from transferring shares held by you in the company to your spouse.

Clearly it is important to take independent legal advice from a specialist family lawyer as soon as possible if you wish to avoid potential claims by your spouse against your limited company.

Please contact our Leeds based Family and Divorce law department for further information on prenups on 0113 320 5000 or by email to family@winstonsolicitors.co.uk.

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Harriet Reid dealt with my divorce aided by her excellent assistant Judith Pearson. Both Harriet and Judith were incredibly quick to respond to any questions or concerns I had during the process. I found Harriet to be ideal for me to talk to as she was direct enough to be able to explain what was happening in "plain English" rather than "legal jargon" and to point out the actions I should and shouldn't take. The process is extremely emotive and a calm understanding advisor is essential.
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I chose Winston Solicitors following a strong recommendation from a close friend, and I have been extremely impressed with the service I received throughout both my divorce proceedings and house sale.A special thank you goes to Teresa and Emily in the Family Law team, who were outstanding from start to finish. Teresa consistently kept me informed about costs and the next steps in the process, which I found incredibly reassuring during what was a very challenging time. Her knowledge, expertise, and professionalism were exceptional, and I am extremely grateful to have had her representing me throughout. Emily’s communication was excellent; she was always prompt, professional, and supportive. Together, they provided guidance and reassurance that made a difficult situation far more manageable.I would also like to thank Laura and Amanda in the Conveyancing Department for their excellent work on my house sale. Their professionalism, efficiency, and attention to detail ensured that everything progressed smoothly from beginning to end.I am genuinely grateful for the support I received from everyone involved and would highly recommend Winston Solicitors to anyone seeking expert legal advice and representation. Their dedication, communication, and client care were outstanding throughout.
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During such a difficult and stressful time I found Winston Solicitors excellent. I worked with Wendy throughout my divorce she was incredible, supportive, hard working and extremely knowledgeable. No question was too silly , no problem was too great for her. I trusted her advice 100% and was more than happy to take her lead. She held my hand every step of the way and for that I will be forever grateful. I have already recommended her to others and will continue to do so. I wouldn't hesitate to use Winston Solicitors in the future
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I am extremely grateful for the support and guidance I received throughout my financial consent order process.Wendy was direct, practical, and very human in her approach. She handled my matter personally, which made a huge difference. I did not feel like I was being passed between assistants or treated like just another case. I felt properly listened to and supported.This was an extremely stressful process for me, but I trusted Wendy completely. Her advice was clear and realistic, and she helped me understand what mattered and how best to move forward.The wording she used in my consent order was particularly strong. She understood my situation accurately and phrased it in a way that clearly explained the reality of the marriage and the financial arrangements. I believe this careful and intelligent wording helped the court understand the case properly and approve the order.I recommend Wendy very highly. She made a very stressful process feel less overwhelming and helped me achieve the outcome I needed.
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