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DIVISION OF MATRIMONIAL ASSETS – HOW IS A BUSINESS OR A COMPANY DIVIDED IN DIVORCE?

DIVISION OF MATRIMONIAL ASSETS

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What are Matrimonial Assets?

Under the Women’s Charter, matrimonial assets include:

  •  Assets acquired by one or both parties during the marriage.
  • Assets used by one or both parties or their children during the marriage.
  • Assets acquired before the marriage but substantially improved in quality during the marriage

Assets which are excluded from the definition of matrimonial assets include gifts or inheritance which have not been improved or used for the family.

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DIVISION OF MATRIMONIAL ASSETS – HOW IS A BUSINESS OR A COMPANY DIVIDED IN DIVORCE?

If a spouse owns a company or a business, the financial matters surrounding the business are frequently an area of huge disagreements between divorcing parties.

Most divorce lawyers will start the enquiry by determining if the business is a matrimonial asset and if it has a value.

If the business  is a matrimonial assets and has a value, then the court will take into account the value of the business when dividing matrimonial assets.

However, as a business is not a liquid asset, the courts are often faced with the difficult task of dividing the assets.  The most frequently used method is where the court gives a valuation to the business, gives a percentage of that value to the other spouse, and then off sets that amount from the pool of matrimonial assets.   In this way, the business need not be sold, and the business carries on. .

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Does the spouse have to sell the business?

The courts do not normally order that a business be sold as a result of the division of assets within a divorce.

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Will I have to transfer my shares to my spouse?

It is also rare for the court to transfer shares in a private company to a spouse as part of the divorce.   The courts are careful not to do anything that may adversely affect the running of the business, especially if the other spouse has never had anything to do with the company.

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How to value my business?

There are a number of different ways to determine a company’s value. It is not uncommon for parties to agree to appoint an independent acountant to value the worth of the company.

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ABOUT PKWA FAMILY LAW

family lawyers singapore

At PKWA Law, our team of Family Lawyers are consistently named as leading Singapore family lawyers by respected independent legal publications such as Asian Legal Business, Singapore Business Review, Global Law Experts and Doyle’s Guide to Singapore Family Lawyers.

Contact us at tel 6854-5336 for a free first consultation.

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Have a question? Contact PKWA Law today for your free consultation.
Call Us At +65 6854 5336
(Family Law)
Call Us At +65 6397 6100
(Conveyancing)
Email Us At mail@pkwalaw.com