Personal Finance

Should I protect my business with a pre-nup?


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I’m getting married later this year and my business partner has suggested I should get a pre-nup between myself and my husband. As I’m a co-owner of a successful fintech company my business partner is worried that I might have to sell my shares if I get divorced. We plan to sell our business in three years and they don’t want that disrupted. Is this something that I can cover in a prenuptial agreement?

Headshot of Caroline Keeley, partner and head of family law at TWM Solicitors
Caroline Keeley, partner and head of family law at TWM Solicitors

Caroline Keeley, partner and head of family law at TWM Solicitors, says the request from your business partner shouldn’t come as too much of a surprise as wedding season is now preceded by pre-nup season. Nor is it uncommon for business partners to require each other to enter into a nuptial agreement. 

These agreements (pre or post-marriage) are there to manage how a couple will deal with their financial arrangements in case the relationship breaks down. A well drawn-up agreement should be able to protect your business interests.

In deciding how to protect your assets, you also need to consider what powers the court has in relation to sharing your business assets in a divorce. The family court has the ultimate power to share all matrimonial assets, which can include shareholdings in a private limited business, regardless of what either party contributed to the purchase or growth of the business. This means the court could require you to sell or transfer your shares to your spouse.

While the court can decide to transfer shares from one spouse to another, this isn’t ideal because the court usually prefers to separately divide assets post-separation. It may, however, be necessary if the company’s managers expect it to be sold in the future.

The court can also order the sale of shares in a private company if it’s the only way to meet the financial needs of both parties. Ideally, the shareholder might want to pay a lump sum to the other party to settle any claims against the business, but figuring out the value can be complicated and expensive. Additionally, the money needs to be available to make the payment.

In the pre-nup it could be helpful to note that the shares were acquired before the marriage or even if they were inherited. You also need to decide if you’re protecting just the capital value of the shares or also the income generated from the business as well. The first step is to clearly define the shares in the agreement.

Then there’s another question to consider: do you want to keep the shares separate so that the money from a future sale stays separate from the marital assets; or do you agree that your partner can benefit from them but want to stop them from forcing an early sale?

The financial needs of the parties will always take priority over any protection of the business. Therefore, if you want to include provisions that stop one party from forcing a sale or transfer of the shares then it is important to ensure that there are other provisions in place so that the financially dependent party is able to meet their needs, particularly their housing needs, in other ways. This is vitally important if the couple has children or plans on having children.

What rights do I have if I’m made redundant?

I am approaching my two-year anniversary at my job, and I have heard noises that the firm might cut some jobs, with those who joined less than two years ago most vulnerable. With the fixed term of my mortgage approaching, I would be in a poor financial position if am let go. Do I have any legal rights if I am made redundant?

Headshot of Chris Deeley, employment associate at law firm JMW Solicitors in London
Chris Deeley, employment associate at law firm JMW Solicitors in London

Chris Deeley, employment associate at law firm JMW Solicitors in London, says as the law currently stands, you would not gain full protection against unfair dismissal as an employee until you reach two years’ service. Unfortunately, this means it is considerably more straightforward for your employer to make you redundant. This would save your employer from significant costs, as conducting a fair and thorough redundancy process can be very time-consuming. If you have less than two years’ service you will still be entitled to notice pay and any other contractual entitlements up to your termination date, but you will not be entitled to any statutory redundancy pay.

The lack of unfair dismissal protection means that currently you could be dismissed for almost any reason and even without following a fair process, although there are a few exceptions. The most common are dismissals for discriminatory reasons, or those done to punish an employee for whistleblowing or for alleging that the employer has infringed their statutory rights. For example, your employer should not use attendance records as a factor to determine redundancy, because this could disadvantage those who have needed to take more sick leave than others because of a disability, and so could constitute disability discrimination. 

If you are made redundant before your two-year anniversary and decide to take legal action, the burden before an employment tribunal would be on you to show that the true reason for your dismissal was a prohibited one, which can be a very difficult task. Your employer can simply point to your lack of rights meaning you will be cheaper and easier to dismiss. In most cases, barring where explicit evidence to the contrary exists, that will probably be enough reason to justify a lawful dismissal.

If you reach two years’ service, however, the story will be different — you will gain unfair dismissal rights, meaning your employer would need to follow a full and fair redundancy process to lawfully dismiss you for redundancy.

Our next question

My husband and I currently own an investment property in the Midlands and have been looking to invest in additional properties with an eye to running a furnished holiday let business in our area, which I would run myself in a full-time capacity. We recently came into an inheritance which means we are now in a position to buy. However, I understand there are a number of tax changes due in 2025 that may impact both the furnished holiday-let and buy-to-let market. How should I build my property portfolio from a tax perspective — am I better off as a landlord or an Airbnb host?

This protection can kick in slightly early — if you are dismissed with immediate effect within one week before you reach the two-year mark, you can still benefit from unfair dismissal protection, as had you been given the one week’s notice required by statute, you would have crossed the two-year mark and gained those same rights. 

The new Labour government has pledged to reduce the qualifying period for unfair dismissal protection, possibly making this a “day-one” right, and this was included in the King’s Speech. Legislation to make this proposal into law is yet to be tabled, but if it comes into force, it is likely to require employers to reconsider how they deal with redundancy situations, as well as other dismissals. 

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.

Do you have a financial dilemma that you’d like FT Money’s team of professional experts to look into? Email your problem in confidence to money@ft.com.



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