Legallink | Find the Right Law Firm for You | My spouse and I operate a business together in Sydney, and with our impending divorce, I am seeking guidance on the equitable distribution of shared business assets and liabilities. Additionally, I seek advice on protective measures for my own interests during this process.

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My spouse and I own a joint business in Sydney, but we are now planning to divorce. I need to know how to deal with joint business assets and debts during the divorce process, and what actions I should take to protect my rights.

When divorcing in Australia and owning a joint business, the division of assets and debts can be complex. Here's how joint business assets and debts are typically handled during the divorce process, along with actions you can take to protect your rights:

1. Business Valuation: The first step is usually to determine the value of the joint business. This may require hiring a professional business valuator to assess the business's assets, liabilities, and overall worth.

2. Ownership Structure: Consider the ownership structure of the business. If you and your spouse are equal partners, the assets and debts may be split evenly. However, if one spouse has a majority ownership stake, their share of the business may be considered separate property.

3. Financial Records: Gather and review all financial records related to the business, including bank statements, tax returns, profit and loss statements, and balance sheets. These documents can help determine the value of the business and its financial health.

4. Legal Advice: Seek legal advice from a family lawyer experienced in business matters. A lawyer can explain your rights and obligations regarding the joint business, help you understand the legal implications of various options, and represent your interests during negotiations or court proceedings.

5. Negotiation or Mediation: Consider negotiating with your spouse to reach a fair and amicable agreement regarding the division of the joint business assets and debts. Alternatively, you may opt for mediation, where a neutral third party helps facilitate discussions and reach a mutually acceptable resolution.

6. Property Settlement: If you and your spouse cannot agree on the division of the joint business assets and debts, you may need to apply to the court for a property settlement order. The court will consider various factors, including the contributions of each spouse to the business, financial needs and resources, and the future needs of both parties and any children.

7. Protecting Your Interests: Take proactive steps to protect your interests in the joint business, such as:

Maintaining accurate financial records.
Securing important business documents and assets.
Consulting with a business or financial advisor to explore options for restructuring the business or protecting your investment.

8. Legal Documentation: Ensure that any agreements reached regarding the division of the joint business assets and debts are documented in writing and legally binding. This can help prevent disputes and provide clarity moving forward.

Remember that every divorce case involving a joint business is unique, and the outcome will depend on various factors, including the specific circumstances of your situation and applicable laws. Seeking legal advice early in the process can help you understand your rights and options and work toward a fair resolution.

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Date

12 June 2015

Place

SYDNEY

Judge

MAY,RYAN,ALDRIDGE

Highlights

On 12 June 2015 his Honour made final orders in a long running property dispute between Ms Cuthbert (“the wife”) and Mr Cuthbert (“the husband”) (Cuthbert & Cuthbert [2015] FamCA 438). His Honour found that the parties’ net assets amounted to $2,515,052, together with superannuation of $80,760 (at [148]). The parties’ contributions to those assets up to the time of separation were found to be equal (at [164]). Having regard to the parties’ post separation contributions, his Honour assessed the wife’s contributions as 55 per cent and the husband’s as 45 per cent (at [171]). After taking into account s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) the primary judge found that a further adjustment of 2.5 per cent in favour of the wife was warranted (at [180]). This led to the finding that the wife was entitled to 57.5 per cent of the net assets, namely $1,492,591 (at [181]). That entitlement was to be satisfied by the wife retaining the assets then in her hands and receiving a payment from the husband of $159,470. After his Honour published the reasons for judgment, the wife brought an application under r 17.02 of the Family Law Rules 2004 (Cth) to correct the orders. She contended that the primary judge had wrongly taken into account a liability of $174,347 when identifying the parties’ assets and liabilities and had incorrectly included a liability of $342,527 as a liability of the parties when, in fact, it was a liability of the husband alone. In his judgment published on 16 September 2015 the primary judge rejected these contentions but determined that an adjustment to the pool of $342,527 was required due to this “inadvertent error” (Cuthbert & Cuthbert (No 2) [2015] FamCA 763 at [6]). This led to increased entitlement forthe wife from $1,492,591 to $1,689,544. The husband was thereby required paytothe wife an additional $196,953. The wife’s Amended Noticeof Appeal filed 20 May 2016 raises issues as tot he primary judge decision in relation to t he parties assets (including superann

Judgment

The text below is a copy of the Court's Reasons for Judgment under the pseudonym "Cuthbert & Cuthbert." The judgment states that the husband has already paid the wife the amount of $356,423.

Other FAQs You may Interested In

1. My spouse and I jointly own a property in Sydney, yet we are unable to reach an agreement on its division. I am seeking clarification on the legal procedures involved in asset distribution during divorce proceedings, as well as the rights and obligations associated with it.2. Despite reaching a settlement post-divorce, I suspect my former spouse may be concealing assets. I seek clarification on the procedures for uncovering undisclosed assets and the legal avenues available to safeguard my interests.3. have observed instances of my ex-spouse intruding upon my privacy post-divorce, raising concerns of potential legal violations. I am interested in understanding the legal protections available to safeguard my privacy rights during divorce proceedings and potential actions to address this behavior.4. Having married in Sydney but subsequently relocated abroad, I find myself in the process of divorce. I require clarity on the necessity of my physical presence for the legal proceedings and the procedures for managing this matter remotely.5. I completed a half-day trial shift at a meat processing factory in Sydney, where I was assigned tasks without any guidance from a mentor or experienced staff. Under Australian law, should I be paid for this trial work?

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