“Usually, if a marriage, civil union or de facto relationship has lasted more than 3 years, all
relationship property will be divided equally between the parties unless there is an opting out
agreement, or if the Family Court determines that there are extraordinary circumstances which
would make equal sharing unacceptable,” explains Paula Lines from The Law Shop.
“Your business is most likely relationship property so if you and your partner separate, the business
will need to be considered when deciding how to divide the assets. This is regardless of whether only
you or both of you work in the business,” she says.
In some cases, it seems obvious that one party will retain the business, but that party will likely need
to forego other relationship property to equalise the value. In other situations, especially when both
parties work in the business, it can be harder to agree on who should keep it. Sometimes, it will be
easier to sell up. But while the decisions are being made or it is being marketed for sale, someone
still needs to be running the business to maintain its value.
“If you have a partnership or shareholder’s agreement, the issues should be covered and the path to
resolution should be clear. In the absence of an agreement, you will have equal rights to make
decisions, access information and generally keep the business running. If necessary, you can apply to
the court to make decisions on how to get through this interim period,” Paula explains.
The best way to protect yourself, and your business, is to get things right from the get-go and make
sure that you have the correct documents in place. The Business Law team at The Law Shop can
assist you with partnership and shareholder agreements, sale and purchase agreements, loan
contracts and securities, and all other documentation you need to protect your business.
Their family lawyers can expertly advise you on the Property (Relationships) Act. If you prefer to be
prepared and proactive, they can assist you with drawing up a Contracting Out agreement, also
known as a pre or post-nuptial, before you get married or enter into a new relationship. With this,
you can specify how you want to protect certain assets in case of a separation.
“Contracting out isn't just about prenuptials. It’s also used in estate planning. It’s a document that
will make dividing up property much easier if it comes to that,” Paula says.
The team at The Law Shop understands what’s involved in running a business, and how to legally
deal with any curveballs that may come your way. Give them a call on 0800 LAW SHOP (0800 529
7467) to get your personal and business needs and documentation sorted. With a no-nonsense
approach, The Law Shop is there to help.