Can I walk away from joint business with wife and start a new one?(5 Posts)
My wife and I separated approx 6 weeks ago. She has left and is currently at her mothers.
We run a ltd company together. The business is heavily reliant upon me. If I'm not there the business won't survive a week. We're both directors and 50/50 shareholders.
My wife has never put many hours into the business and the business can easily survive without her. To be honest she's been a bit of a challenge to work with and the business would have failed if left up to her. I've grafted hard and built up a good business. This is a big part of why I want to separate.
We have around £350k in debts as we made a bad business decision approx 5 years ago. We draw down approx £70k over a year from the business. This year it will likely make £90k profit.
We have virtually no assets. We rent our house. Vehicles are hired. No children.
In trying to get a separation agreement put together I've suggested I take 100% of the business, take on 100% of the debts (£350k) and pay her £12k per year for 3 years to help her get back on her feet. She agreed.
It has all been amicable but some days she's in a foul mood and feels she's getting a poor deal. I personally think it's a cracking deal. If I was offered what I'm suggesting to her I'd jump at it. In fact I'd take the deal without the £12k per year. I'd love to walk away from this debt free! She keeps wanting more and more and the deal is starting become unattractive to me. She's now saying she wants to remain a shareholder and director in the business as she needs more income.
What I'd like to know is, if push comes to shove, can I walk away from our existing business. Start a new business and start again on my own with me as sole director? The staff would leave and come and work for me in an instant. I don't want to do this but I don't want to budge any further otherwise I'm going to end up working my nuts off to give it to her. I produce around 95% of the business' income. I spent 5 years working 120 hour weeks when she was working approx 20!
As I understand it, anything I do business-wise after we have separated is nothing to do with her. Am I correct?
I want to remain amicable but I'm starting to feel like she's getting greedy so I need to know if what I have proposed above is possible. If she pushes me for much more I can see a fall out coming and I'll wind the business up and be on my way.
Any help much appreciated.
www.mumsnet.com/Talk/legal_matters You might be better to post on the legal forum, though you may have to wait a while for a knowledgable response. You'll need to take proper legal advice anyway.
Thanks for that, will post in legal section.
Are you suggesting that you resign and then poach the staff, leaving your wife with a business saddled with debts? Or are you suggesting you put the business into administration leaving your debtors out of pocket?
Legally you can do both of those things. Morally, they both seem pretty shitty.
I'm not sure if you 're saying your business has no assets or that as individuals you have no assets. However if you have instigated the divorce and are reducing your wife's income from £30k to £12k then any decent solicitor would advise her to stay on as a Director instead.
The other issue to consider is whether you linked the share value to the value of the business. Sometimes that's overlooked and if that's the case then you can argue the shares are only worth the initial valuation. Really though wouldn't it be better to try to reach a mutual agreement? With the help of solicitors if necessary.
I actually did more or less what you are considering. I am the wife but my business role was very much like yours - business is me, basically. I made my X a reasonable offer for his share, based on net asset value. He refused to accept this, and I found running the extant business with him as a partner very difficult.
So literally one night I went on companies house web site & set up new ltd co wholly owned by me. My staff resigned from old company & were re-hired by new ; all customers transferred to new company, new bank acct, new VAT number, etc. A lot of work. A good accountant & bookkeeper essential. The move saved my life, my finances & my sanity.
Your STBXW can come back at you under company law, but this would be expensive & net asset value may not make it worth her while..
I only did it as my X was being completely unreasonable & I felt it the best business decision. It definitely was. P M me if you have specific questions.
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