Taylor Walton
Divorce and the family-owned business
News that Bill and Melinda Gates are divorcing has focused largely on the likely division of their huge personal wealth, with less said about the future of their various joint ventures, like the Bill & Melinda Gates Foundation. Family businesses generally succeed through a sense of unity,
cooperation and family ties. But when those family ties weaken, the impact on a family business can be as devastating as it is for the individuals concerned. Relationship breakdown can prove particularly tough if the business is run by a husband and wife, as with the Gates Foundation, especially if they are joint partners in the company. Research from 2018 reported around 1.4m UK companies are run by couples, with the number on the rise.
If a couple own and run a business, both will understand the other is
entitled to some benefi t after divorce, but many business owners remain unaware their partner could be entitled a share of their business, even if they were never involved in its day-to-day running. T is outcome is also
26 3 ALL THINGS BUSINESS
Ben Twitchen Taylor Walton
more likely with longer marriages or a signifi cant inequality in fi nancial resources.
Divorce can be bad for business A divorce process that involves a family business can be complex, with its valuation, inheritance wishes, fi nancial contributions, dividend payments and the shares or interests of other family members, just the start of what is typically a long process. Common issues arising from divorce involving
business owners include: - One partner changing the business before announcing their desire to divorce - Disputes over the future of the business - Disagreements concerning the business value and potential sale - Disputes about who contributed what to the business - Disagreements about any restructuring after divorce
T e courts will try to protect a family business from being too involved in any divorce, hoping to avoid the business having to be broken up or sold off to release capital to pay the court determined settlement. However, whilst the courts are reluctant to approve any settlement which could ruin a family
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