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