It is not uncommon for a couple’s “assets” to include a company. It is quite common for that company to hold assets such as a business and/or commercial properties. For example, the company may be the trustee for a family trust.
A common misconception is that those structures and entities keep the assets out of the reach of the Family Court and cannot be pulled into family law proceedings.
This is not the case. It is important to consider during property settlement negotiations and proceedings, what implications may arise for those companies, partnerships or trusts.
As an example, you may be a partner in a business. You, along with the other business partner, are the company directors. The company owns the commercial building out of which the business operates from. Your interest in that business can be an asset that is relevant to your family law property division.
The Family Law Act gives a Court power to make Orders joining others called “third parties” to proceedings. Those third parties can include your company and even your business partner personally.
Orders can include access to business/company records. Some examples include:
The Family Court could make an order that the director of a company transfer shares from one party of the marriage (or de facto relationship) to the other.
A Court order directing that a creditor of the company pay funds owed to the company to your former spouse.
The Court’s powers can have serious implications on business partnerships and companies. It is important that consideration be given as to the effect of orders you may agree to in relation to your business relationships and structures. Partners/other directors need to be aware of orders that can be made when a business partner/director goes through a relationship breakdown and how it may affect the business/company.