Hi,
Having an argument with my mum - I think I'm right and so does she.
if a man or a woman owned a business, would their wife own half or be able to have a say in it if they don't own any of it?
Thanks in advance (Saracen)
Peter.
Hi,
Having an argument with my mum - I think I'm right and so does she.
if a man or a woman owned a business, would their wife own half or be able to have a say in it if they don't own any of it?
Thanks in advance (Saracen)
Peter.
My understanding would be that they where voting shares.
as such they are owned by an entity, so normally in the case of husband and wife, it would be one of them, few bother to create a SPV in their married name for joint ownership!
So, whilst if they devorced, the lazy bitch who never earn't a penny could claim some of the equity, then with those voting shares, she could get her way a bit.
If there was only one share, then it would be harder to decide, but would be up to the courts!
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if there was one share, the solicitors would craete a 2nd share to allow the split from my limited understanding.
1 share worth £2 would make 2 £1 shares
or 100 1p shares, then the wife shags the solicitor and ends up with 51 shares and continues screwing the husband without sex![]()
you can't make extra shares in the firm, without the firm issuing more voting shares!
throw new ArgumentException (String, String, Exception)
I'd say there's a lot of possibilities here, and no clearcut answer. Firstly, "owned" a business how? Is it 100% owned or part-owned? If 100% owned, is it operated as a sole trader or as a limited company? If it's part-owned, partnership or limited company?
Whether part-owned or 100% owned, if it's a limited company you need to bear in mind the separation of ownership and control implied by the "limited" status. Shareholders "own" the company, but don't run it. Directors run the company but don't own it. Of course, someone may be both.
While it is certainly the case that a spouse will often be entitled to a share of a business in the event, say, of a divorce, that doesn't necessarily mean she gets a say in the running of the company. Nor, for that matter, does owning shares mean you, as owner of those shares, get much of a say either, beyond attending and voting at company meetings. And if you're a director, the spouse doesn't get to act as director, if for no other reason that company directors have to be recorded as such with companies house, and have a fairly long list of legal responsibilities as a result of that directorship. For instance, if Fred is a director of BT, Mrs Fred doesn't get to attend board meetings.
Also, many company constitutions and partnership agreements are drawn up with precisely this sort of possibility in mind. While a spouse may well be entitled to a share of assets in a divorce, and would probably inherit some or all after a death, that spouse may be very inexperienced or totally unqualified to take part in the business. Suppose the business was a profession where extensive qualifications were involved, like law, accountancy or medicine. Mrs Fred is certainly not going to get to take over Doctor Fred's patients.
So partnership agreements may well have limitations on transferability of shares, cross-option arrangements and so forth, and company constitutions may also have similar restrictions on share transfers, buy back provisions, etc. The spouse may be entitled to a share in the value of an asset without being entitled to a part of the asset itself.
Also, courts are aware that motivations may be malicious and that a spouse, or ex-spouse, may seek to get at their other half by messing with the business. So if one partner has a business that the other partner is entitled to share in, it'll usually end up with the partner that has the business getting the business, and the other partner getting a proportionately higher share of other assets in a divorce.
Really what I'm saying is that the question covers so many possible scenarios that it's impossible to give a cut-and-dried answer, IMHO. There may be situations in which a spouse ends up with a direct say, but there'll be a lot where they may be entitled to a share of the value but certainly wouldn't get a say in operational decisions.
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