Dealing with your Company in a Property Settlement

What happens with a Company in a Property Settlement

A common question is what happens with a company when parties do their property settlement after separation.

Just because an asset or a business is owned by a company does not mean it is not part of your property settlement.

The fact that a particular asset (say a motor vehicle or bank account) or liability is owned by a company might not matter in family law property settlement applications, as the Court will look at who is actually in control of that asset or liability.

The Court may then include the value of the assets owned by a Company or the debts & liabilities of the Company in the amount to be divided between the parties.

Who Controls or Owns the Company

The Court will want to know who are the Directors of the Company and who are the Shareholders of the Company.

The difference between a Director and a Shareholder is that:

• a Director is a controller of a company;
• a Shareholder is an owner of the company.

A Director may also be a Shareholder, which means that they both own and control the company.

What Orders can a Court make about a Company

Among other things, when dealing with a family law property settlement application, the Court can make orders as to:

 

 

• Transfer shares owned by a shareholder to another person;
• Have the Director of a company resign;
• Relinquish any interest in a company.

A Court can make these Orders whether or not the Court has the consent of the parties.

 

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