We’re separated but can we still run a business together?
When finalising a property division, the Family Law Act is quite clear, that there should be finality. This means a ‘clean (financial) break’ between spouses with no ongoing financial connection. But what if there is co-operation and a jointly run business?
The logic of final financial severance is that it avoids likely complications arising later on.
However, there can be rare exceptions. In a recent case, the separated former husband and wife lodged a consent order with the court but, as it proposed the ongoing joint ownership of a business, the Registrar refused to make the order. They sought a review of the decision.
The business, which was conducted by two companies, operated child care centres. The husband and wife were joint directors and equal shareholders of the respective companies. Most noteworthy, given the success of the businesses and the forecast of continued growth they wished to continue to operate the business jointly.
As a result…
They had both received independent legal and financial advice. Also, they were aware that if there was any future breakdown in the relationship between them, with respect to the operation of the business, that dispute would need to be resolved in a different court.
On the review, the judge accepted that the proposed orders were ‘just and equitable’. The judge also accepted that there did not need to be a complete separation of the parties’ financial interests.
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