Charge on a limited company

[Shockedmum75]

Hi all, I have recently started a limited company with my business partner. It has no tangible assets (our qualifications are our assets, so no stock, premises etc). Things are going well, not millionaires by any stretch of the imagination but doing well.
The problem is my business partner is going through a divorce from a man who, on the surface is very wealthy, but in reality is almost bankrupt. The business was set up 8-9 months after they separated but he is now threatening to put a charge on the business as part of the divorce (in his nasty moments, particularly when she refuses to opens bank account for him to hide his money in!)
I am not sure in what context he thinks this would be done, but I am worrying now that the divorce will have an impact on the business.

We have never borrowed any money and the company is running in profit.

Can he put a spanner in the works?

Tia

Her half of the business is possibly a marital asset - in England assets are divided at date of divorce not date of separation. I am not sure what he means by a "charge"? Has his lawyer said that? Spouses sometimes get a court order to freeze the bank account of their other half if they think money will disappear.

What she and he need to do is agree a clean break financial settlement which is then sealed by the court into a final consent order and then it's all over and done with.

It would be worth you and she agreeing what percentages of the company you own and having all the paperwork well done and ideally a written shareholders' agreement between you. I don't think half of a company like you describe has any value in the early days although I suppose if the company was sitting on £100k of cash and her half is £50k yes that £50k goes in her marital pot and he may well get half of it.

has he got shares in the limited company. Is he a director? If not, I am not sure he can put a charge on the business, but I am not a lawyer.

We both own one share 50/50 but the nature of the business is like a tradesman's would be. Our skills, and a few hand tools but no cars or premises or anything, we have had set up costs like a website and business cards and the like. We are the only 2 directors and everything was set up properly by a well established accountants for tax purposes.
He has had charges put on some of his properties so I think he is just throwing legal terms around without really knowing what they mean.
So can he only have any impact on my partners personal account, he can't make a claim on my half of the business? Could he end up as a quarter shareholder?

The simple answer is there's no way he can put a charge on the business, which is a separate legal entity, and as such cannot be drawn in to the divorce in that way. The court has the power when making final orders on divorce to grant to one spouse a charge on assets owned personally by the other in order to secure payment of a sum of money.
However if your company is merely a vehicle for you both to sell your skills through it is unlikely to have a value beyond its physical assets, net cash, and debtors, so you've nothing to worry about. Look at the memorandum and articles if association as well. There may well be a provision prohibiting either if you selling their shares without first offering them to the other for book value. If there isn't such a provision you should think about putting one in ASAP.

Thank you so much collaborate. I will look into that this morning re the clause.
My mind is now at rest!

Coll, wasn't there a case recently where a wife got assets out of a very very rich husband's companies though which he said were not something he controlled even? I don't disagree with your advice though that it is very unlikely here particularly for what is basically a start up. There have certainly been bigger cases where shares are part of the wealth of the family - eg the FCUK case - half his shares or their value had to go to the wife on divorce.