Ltd company as a matrimonial asset

[idontknowwhattodo1990]

Separating but not divorce at present.

DH has Ltd company, just him. Draws minimum wage, rest dividends. No assets other than a Mac computer.

I am a shareholder but with a different class and only get £500 a year dividends. I am not a director or secretary and have never drawn a wage.

On paper company makes about £40k according to corporation tax liability.

There are no debts but he also doesn't leave anything in the business account beside some for cashflow.

But, the company is just him and without him the company is worthless as he just does IT and the value is in his knowledge and skills. I read this determines the value of the company in a splitc and that value is negligible as no one would buy it.

In a separation will I likely get anything for this? It is DH's only income and I know he doesn't ever do cash in hand so the numbers are right. He's always been against that and it doesn't really halt in his industry anyway as it's an bank transfer.

Thanks.

No you wouldn’t get anything. Just get rid of your share. Give it back. He’s set up as a limited company for tax purposes, so he has a VAT number and looks respectable, and can pay himself with dividends

my only hesitation is as follows. £40k is a low amount to be earning through a limited company ie barely justifies being limited. Are you sure there are no other bank accounts? Ask to see the P&L and submitted annual accounts

Thanks.

He's not VAT registered, not sure that makes a difference.

The turnover is about £70k but he rents an office, has expense for tech stuff. He's not a career person and likes a good work-life balance.

That's definitely it. One thing he definitely is is honest.

He went limited years ago when the benefits were better. He remains limited for convenience as you don't pay anything in advance for corporation tax as you do income tax so it helps cash flow though his accountant said he may recommend some trader soon.

What are the reasons for this being worth nothing to me? Because no one would buy it?

PS. What is P and L?

Edit, sorry I'm thick. Profit and loss. I just know the company turnover is approx £70k and the corp taxxed amount is just under £40k.

What were the net assets on his last few years company accounts?

The value of the company is likely nil or near there.

there’s no tangible products, tangible assets, nor goodwill. It’s just his job that he’s set up as ltd company’s he’s self employed and will perform it jobs for company’s rather than being other headcount.

he could close it tomorrow and it would be worthless.

what you do know is his income is 40k fir any division relating to house/pension/cms. Which is not high

> What were the net assets on his last few years company accounts?

The company has no assets other than a decent computer.

Should also add I have a pension and he doesn't. Have a house joint mortgage but he's paid for everything including renovations in the house. Does a lot of school runs as well as his work is flexible.

Sounds like it’s really just his job, he contracts his services. Why would you think you should get anything from that? Doesn’t seem to be a business you have built up together, he isn’t a high earner.

It should be treated his job, not a matrimonial asset. Everything else split accordingly.

Thanks, I'm not saying I'm entitled to anything, just asking.

Is it more an asset if I have shares and/or the company has assets, staff, etc and making a lot of money?

I think having shares is irrelevant if the company has zero value on sale (although check with a lawyer there’s no way around this).

Assets / staff, of course. If the company owned an office block / servers etc. and had 100 staff, it would be saleable as a going concern - if your ex walked away it would be a bump in the road not fatal to the company as a whole. The saleable value of the company would be taken into account.

Whether it makes a lot of money can be taken into account but depends on why. If it’s just because the sole employee / director is super brilliant and brings in millions by himself, that’s very different to 100 employees bringing in normal amounts for their employer.

Thank you. It's neither really. No assets or employees and he's not making mega money.

Other than a decent computer for work everything is rented/leased: office, software subscriptions, etc.

I'm just preempting things and will get more formal advice but, for now, when it comes to financial planning, based on the above, should I assume the business isn't worth anything for the puorses of asset splitting? Beyond the fact, another person in the same position could possibly taken on some of the clients, the company would be usefless without him. He's very good at what he does we a good reputation but he's never really had the commercial brain to earn good money with it.

Assets would be

capital items
buildings
stock
goodwill

etc

here there is none

you should focus on

splitting house and your pensions

Thanks for clearing that up.

what you do know is his income is 40k fir any division relating to house/pension/cms. Which is not high

Although for cms, would they count the dividends? I'd have thought because he pays himself the bare minimum, that's what'll be used to calculate cms and OP will get very little unless he's a stand up guy and pays a more honest amount.

I do think dividends are counted though I don't know how that works as his income varies year on year (by a marginof about £10k). I know that he does delcare everything and would pay whatever he is olibged to to but similarly, he would take what he's entitled to (e.g. half my pension).

He’s not automatically entitled to half.

you’re both entitled to ensure all assets held either jointly or individually are declared. And both entitled to a fair share. That does not mean 50:50. It might do but equally might mean more or less in either direction

Thanks. Final questions:

Does the fact he's always paid all the mortgage count in his favour?
We agreed a temporary separation and he borrowed money from the bank so he could pay for the mortgage and the rent on his new place. Would that be split between us?

Paying the mortgage, probably no, the loan to temporarily cover two houses, probably yes.

Since the loan is in his name (I assume), this will likely be dealt with by giving him a larger share of the assets than otherwise (not necessarily with a starting point of 50:50, that depends on various things).

The actual division of assets depends on individual circumstances (length of marriage / relationship, earning capacity, children, if one partner gave up work to be a SAHP etc).

Having said the above, a solicitor with full information will be able to give you better advice.

You'd be a shit to even consider going after his company OP. You're coming across as very grabby I'm afraid.

It’s amazing how often women are accused of being ‘grabby’ for seeking their legal rights.

I bet the thought of being grabby won’t stop the ex going after the OP’s pension even though she’s the only one who contributed to that!

If I had far more assets than my soon to be divorced spouse (which it appears the OP does), I’d be trying to take into account all his assets in order to keep as much as possible of the money I’d earned too.

It probably won’t count who pays what as law sees that generally as not relevant

the debt in his name will ( and should ) be considered matrimonial one as he’s taken it to fund your housing needs and you’ve had some beneficial use of his asset,

Thanks everyone.

crikey, she’s just asking for information, no need to be so unkind

Also any retained profits is an asset which the ex has access to. Do you have the latest set of accounts? You can look them up on Companies House.

I have a Ltd company in a similar situation, I was a sole trader but started a Ltd co for tax reasons but the business is built solely on my services. My ex insisted on a forensic accountants report and they’ve given my business a ‘value’ based mostly on the company car but also goodwill - which I think is insane, as the goodwill is attached to ME and not the business. But hey ho, it looks like my ex will get ‘his share’ of a business which can’t be sold without putting me out of work (and it can’t be sold anyway, as nobody would buy it - the entire business is built on my personal coaching type services). In addition, the retained profit is being cleared out (less tax) and split. This is despite the business suffering a down-turn due to the economic climate.

You might not want to take any share out of the business but you should inform yourself of the financial landscape so that you have leverage.