Financial Settlement - Limited Company?

[skyfullofstars123]

I’m looking for some advice/opinions please mainly on limited companies and how they are treated as part of a financial settlement.

I’m 62 and STBEx 60, been married 29 years and separated for 2+ years. I’m living in the marital home with our two adult sons. He has lived in a rental property since separation.

Form D8 was submitted this week jointly and we both intend agreeing a financial settlement without involving solicitors, other than to submit the Consent Order.
He is a high earner (£150K approx) and works through our limited company of which I am a director and 50:50 shareholder.

I have received a salary/dividends for 15 years currently £50K pa approx. He is the only person working for the company (consultancy). I also earn £12,200 pa in a part-time job and gave up my career to look after our 2 children 20+ years ago. I also receive a small final salary pension of £2,000 pa.

Should I resign as a director/employee following divorce and have a clean break from the company offsetting an agreed value in the financial settlement? How do we work out that value – Is it based on my current salary, future earnings, etc? Does anyone have any experience or knowledge of this please?

OR could I retain my current director/employee status and we agree that the company continue to pay me a salary/dividends at, say, an agreed reduced rate, thereby enabling the company to continue to make use of the tax savings?

What are the implications of me retaining a 50% interest in the company once we are divorced?

If I resigned as a director/employee and didn’t offset an amount in the financial settlement, as an alternative, would it be unreasonable/advisable for me to ask for a spousal maintenance payment each month while he is still working or would company resignation/offset be better?

I would like to stay in the marital home (mortgage free) and providing we can agree an affordable settlement I plan on buying him out to enable him to buy a property instead of renting which, of course, he needs to do.

Given the length of our marriage and circumstances above is my understanding correct that there are potential contributory factors that may be relevant to the financial split going slightly more in my favour?

• Age, length of marriage, his earning potential is way higher than mine, the salary I currently receive from the company will potentially cease, the standard of living we enjoyed before the marriage ended.

I would appreciate any thoughts/knowledge/experience as to whether any of these points are relevant and should be taken into account.

This forum has been invaluable to me at this difficult time but as our situation is not clear cut I think it would be in my own interest to get specific legal advice but your thoughts/advice would be very much appreciated in the first instance.

Would you advise I download the MN Financial Settlement Guide (£20)? TIA

I think you need proper legal advice specific to company valuations and how these are treated in divorce in order to reach fair outcome

You need legal advice. Your 50% of the company is worthless if he walks away post divorce. He can easily start up under a different name and take all the clients. Leaving you with 50% of a failing business.

During a divorce you will look financially ok off and will get 50% of the assets. But if he leaves the company post divorce can you operate at the same turnover. What are you going to buy him out with if your income falls to 14k per year.

You need proper legal advice. I am not a lawyer, but I must admit that my gut feeling would be that a clean break will probably be best in the long run - remaining financially entangled may make it difficult for you both to move on with your lives.

Thank you all so much for your replies, I am definitely going to get proper financial/legal advice about this.

if the company is just his consultancy services, I would not be expecting to keep an income from it. As previous posters have said, he could shut it down and set up another company doing the same thing at any time. If you want to try to get spousal maintenance, you need specialist legal advice.

In all honesty I would attempt to agree an amicable final settlement.

His potential earnings are a factor but his age means that won't be taken into account as much as a younger person. As he is the sole employee I wouldn't retain a stake in the future. If you can come to an arrangement you both agree is fair taking into consideration that you gave up working to raise the family and support him, that is your best bet. I'm getting 55% as an example