Turning your business into a company can be a great way to accelerate the development of your business.
In Family Law, companies are not immune from consideration or division under the Family Law Act, but the law surrounding them is quite complex. This article extends upon our earlier discussion of companies and their taxation consideration and focuses on the Court’s treatment of them when one spouse attempts to hide assets in a company. As with all Family Law cases de-facto and married couples are treated the same.
In our earlier Trust article we noted that the Court will disregard a trust if one party controls the assets in that Trust. This same principle applies to a company. Companies are interesting business structures as a company is considered a separate legal entity to the owner or shareholders of the company. A company can own assets and make contracts with people.
In Family Law cases it is common to see that one spouse has most of their assets owned by their company. However, if it is shown they have control of that company and its assets the Court will pull away the veil of the company personality and treat the assets of the company as assets of the spouse/owner.
In order to come to a conclusion on these issues your Family Lawyer will ask for disclosure of all relevant financial documents in relation to the company as well as hiring an accountant or tax expert for an expert opinion. Such expert financial and legal advice is essential as even if it is found that the assets in a company are spittable, there are various taxation and accounting rules that regulate assets in a company.
Relationships involving a company or business are a difficult and complex area of Family Law. If your circumstances involve a company or a business you should seek family law legal advice from a specialist family lawyer. Call Michell Meares now on 4324 7699.