Divorcing business owners should consider Collaborative Law
Business owners who suffer a family breakdown should be aware of how matrimonial property laws can affect their business, according to Nathalie Boutet, a Toronto based collaborative family law lawyer, in her article in Canadian Consulting Engineer.
Whether the spouses are married or live common law, they are subject to the application of the laws where they separate.
For married couples, “provinces and territories create what is often referred to as ‘community of property’ where the net value of certain assets acquired during the marriage are divided equally on separation.”
For example, if a non-title spouse becomes the owner of shares in the other spouse’s business through a vesting process, he or she will have access to the corporation’s financial statements, as well as the right to vote on matters affecting shareholders. A separation litigated in court, she adds, will result in sensitive financial and business information becoming public and accessible to anyone, including competitors.
And although common law spouses usually do not share the assets in their own name when there is a marital breakdown, “a spouse without title could make a claim against the assets of the other if they can establish that they made some other contribution towards the value of the assets of the other spouse,” says Boutet.
While there are several legal processes available to separating families – ranging from spouse-to-spouse negotiation to court – collaborative negotiations and mediation are best suited for resolving marital disputes, says Boutet, especially for families with a high net worth and a business.
See her full article in Canadian Consulting Engineer.