As solicitors we see situations every day where people have failed to plan for the worst-case life scenarios. Incapacity. Death. Divorce. In any particular order, these are not a list of the top-three events in anyone’s life. However, there are steps you can take to reduce the impact of these life events on your business. We have tried to lighten the mood of the subject through the use of bleak comedy. The characters in the following tale are a figment of the authors’ imaginations, but the circumstances in which they find themselves are based on real-life events. We apologise in advance for the lack of imagination in the names, but we are no Hans, Christian or Anderson. On with the tale…
Once upon a time, in a town not far away, there lived two successful entrepreneurs, Maggie and Mike. Maggie did not know Mike and Mike did not know Maggie.
Maggie runs Maggie Limited with her business partner Michelle. They each own 50% and they have a comprehensive shareholder’s agreement. Maggie is married to Mark and entered into a pre-nuptial agreement, ring-fencing her business interests in the event that her marriage should break down. Maggie and Mark each took legal advice and signed the document well in advance of the wedding and they review it every five years or so.
Mike runs Mike Limited with his business partner Morris. They each own 50%. They trust each other and feel that that they don’t need a shareholder’s agreement. In any event, they’re too busy running the business. Mike is married to Melinda. They felt that a pre-nuptial agreement was unromantic and, anyway, they’ll be together forever (can you tell where this is going yet?).