Relationship breakdown can be stressful, but pressures compound when your partner is also your co-director, business colleague, and shareholder.

Imagine this. You have worked hard to develop your successful business. Life is good. You are in a settled relationship with an employee, you met through work. Your partner is doing so well, you would like to promote her to director and reward her by gifting shares. The book keeper has suggested this is a very good idea indeed, as it may help you with income tax payments. You do not yet live with your partner but moving in together is very much on the cards, and you both want to marry and have children.

What are the risks should the relationship break down? Are there any hidden pitfalls? What can you do to protect yourself?

Far from a fictitious case study, these are common events.

  1. Do not create a potential employment law claim. Be transparent and ensure all employees are treated equally and fairly and any promotion is purely on merit. All employees should have an employment contract or service contract and job specification. No employee should be able to argue the validilty of any promotion, or suggest it has been as a result of a romantic relationship;
  3. If gifting shares, then consider the rights attached to the shares. Consider taking advice regarding re-classification of shares and use of a Shareholders Agreement;
  5. Before moving in together, take advice in relation to the preparation of a Living Together Agreement. This can be an immensely valuable document which can clarify your respective rights and responsibilities towards each other, and prevent any misunderstanding which could lead to legal claims, should the relationship break down in the future;
  7. If contemplating marriage, then a Pre-nuptial Agreement is essential. They are not for the rich and famous but are a very practical and helpful way to clarify expectations and indeed invest in the marriage. We would not comfortably leave our houses and businesses without insurance, so nor should we enter into one of the most significant commitments we will make in our lifetime, without an understanding of the rights, responsibilities and entitlements marriage can bring. A well drafted Pre-nuptial Agreement entered into consensually, following a documented process of disclosure, will stand the test of time;
  9. Do not forget to review and update your Will and ensure it is fit for purpose and reflects your change of circumstances. Consider a Power of Attorney too;
  11. Working Holistically, our family team can provide a wrap-around service to protect you, your relationship, your assets and your business.

For more information please contact our Family Team.




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Fiona Apthorpe


Partner, Derby

+44 (0)1332 254 124


Jane Cowley


Partner, Nottingham

07436 292567