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Bay of Plenty Business News June/July 2019

From mid-2016 Bay of Plenty businesses have a new voice, Bay of Plenty Business News. This new publication reflects the region’s growth and importance as part of the wider central North Island economy.

From mid-2016 Bay of Plenty businesses have a new voice, Bay of Plenty Business News. This new publication reflects the region’s growth and importance as part of the wider central North Island economy.

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BAY OF PLENTY BUSINESS NEWS <strong>June</strong>/<strong>July</strong> <strong>2019</strong><br />

27<br />

How Separation can affect your <strong>Business</strong><br />

When a couple decides to separate, one <strong>of</strong><br />

the biggest issues is how their belongings<br />

will be divided between them. This is<br />

understandably a difficult and stressful time<br />

for everyone involved, but things could<br />

get even more complicated if you own a<br />

business.<br />

“Usually, if a marriage,<br />

civil union or de facto<br />

relationship has lasted<br />

more than 3 years, all relationship<br />

property will be divided<br />

equally between the parties<br />

unless there is an opting out<br />

agreement, or if the Family<br />

Court determines that there<br />

are extraordinary circumstances<br />

which would make<br />

equal sharing unacceptable,”<br />

explains Paula Lines from The<br />

Law Shop.<br />

“Your business is most<br />

likely relationship property so<br />

if you and your partner separate,<br />

the business will need to<br />

be considered when deciding<br />

how to divide the assets. This<br />

is regardless <strong>of</strong> whether only<br />

you or both <strong>of</strong> you work in the<br />

business,” she says.<br />

In some cases, it seems<br />

obvious that one party will<br />

retain the business, but that<br />

party will likely need to forego<br />

other relationship property to<br />

equalise the value. In other situations,<br />

especially when both<br />

parties work in the business, it<br />

can be harder to agree on who<br />

should keep it. Sometimes, it<br />

will be easier to sell up. But<br />

while the decisions are being<br />

made or it is being marketed<br />

for sale, someone still needs<br />

to be running the business to<br />

maintain its value.<br />

“If you have a partnership<br />

or shareholder’s agreement,<br />

the issues should be covered<br />

and the path to resolution<br />

should be clear. In the<br />

absence <strong>of</strong> an agreement, you<br />

will have equal rights to make<br />

decisions, access information<br />

and generally keep the business<br />

running.<br />

If necessary, you can apply<br />

to the court to make decisions<br />

on how to get through<br />

this interim period,” Paula<br />

explains.<br />

The best way to protect<br />

yourself, and your business,<br />

is to get things right from the<br />

get-go and make sure that you<br />

have the correct documents<br />

in place. The <strong>Business</strong> Law<br />

team at The Law Shop can<br />

assist you with partnership and<br />

shareholder agreements, sale<br />

and purchase agreements, loan<br />

contracts and securities, and all<br />

other documentation you need<br />

to protect your business.<br />

Their family lawyers can<br />

expertly advise you on the<br />

Property (Relationships) Act.<br />

If you prefer to be prepared<br />

and proactive, they can assist<br />

you with drawing up a Contracting<br />

Out agreement, also<br />

known as a pre or post-nuptial,<br />

before you get married or<br />

enter into a new relationship.<br />

With this, you can specify<br />

how you want to protect certain<br />

assets in case <strong>of</strong> a separation.<br />

“Contracting out isn’t just<br />

about prenuptials. It’s also<br />

used in estate planning. It’s<br />

a document that will make<br />

The best way to<br />

protect yourself, and<br />

your business, is<br />

to get things right<br />

from the get-go and<br />

make sure that you<br />

have the correct<br />

documents in place.<br />

dividing up property much<br />

easier if it comes to that,”<br />

Paula says.<br />

The team at The Law Shop<br />

understands what’s involved<br />

in running a business, and<br />

how to legally deal with any<br />

curveballs that may come<br />

your way.<br />

Give them a call on 0800<br />

LAW SHOP (0800 529 7467)<br />

to get your personal and business<br />

needs and documentation<br />

sorted. With a no-nonsense<br />

approach, The Law Shop is<br />

there to help.<br />

STEPHANIE NORTHEY<br />

LL.B | Director<br />

PAULA LINES<br />

LL.B | Director<br />

SARSHA TYRRELL<br />

LL.B | Director<br />

ROTORUA<br />

1268 Arawa St<br />

Rotorua<br />

TAURANGA<br />

1239 Cameron Rd<br />

Greerton

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