If you own a business in your own name or jointly with your spouse in a partnership, the assets and liabilities of the business may form part of the asset pool available for division in a family law property settlement.
You or your spouse may be a director and/or shareholder of a company that owns and runs a family business. While that company may be the legal owner of property, if the Family Court finds that you and/or your spouse control the company, it may find that the property of the company is in reality the property of the parties. This may allow the Court to include the company assets in the asset pool and make them available for division between the spouses.
Family companies may lend money to the shareholders or other related entities such as family trusts. If so, these loans create obligations and liabilities under Division 7A of the Income Tax Assessment Act.
You should provide your lawyer with the following documents –
- The deed which established a partnership and any subsequent amendments to the deed
- Partnership tax returns and financial reports
- The constitution or memorandum of articles of any company
- Company tax returns and financial reports
- Division 7A loan agreements
If your family law property settlement involves any of the above entities, contact us for advice.