There is a very real scenario of saving a business from tax claims or claims by the family following the death of a business owner. Continuity of the business in the right hands will be crucial for the business and or for the family.
The emphasis should be placed upon making a Will so the business owner controls who gets what and when after their death and who will be responsible for managing the business thereafter. To minimise exposure to tax claims, we recommend a thorough review of a business position in relation to business property to maximise the available relief as it can be easily missed but easily captured with some advanced planning.
Family and Matrimonial
Separation and divorce can also lead to treacherous waters where matters can become difficult to resolve. This is often the case where one or both parties owns a business. There are various methods of contingency planning for the breakdown of a relationship. The starting point being the division of the parties assets. Matrimonial property is defined as all property acquired during the marriage with property inherited prior to the marriage generally falling out of the net. It is crucial to plan ahead for potential separation and divorce in the event of a re-structuring of assets or business interest.
If this is not appropriate for tax planning, we advise of the benefits of entering into a pre or post -nuptial or Co-Habitation Agreement. These are becoming more common and are often intended to ring fence business assets of those that have passed down through the generations.
Corporate and Commercial
There are key points to note on partnership and corporate law. The creation of a limited company to protect personal assets and to restrict personal liability or a limited liability partnership are described as between a traditional partnership and a limited company. The catchphrase of the day is “not to bury your had in the sand”. It is important for business owners to document their arrangements fully to provide certainty and avoid disputes in the future. Up to date Partnership Agreements or Share Holder Agreements are key.
Litigation / Insurance and risk
Be fully insured and try and avoid litigation.
These notes are just intended as a taster as to some of the issues anyone can face in relation to business and personal assets following estate planning, divorce, corporate and commercial restructuring or litigation.