Family business and divorce of entrepreneurs

Service

A divorce decree brings huge changes to the life of every ex-spouse. The changes concern not only marital status, rules of exercising parental authority or the amount of child support payments. In the case of spouses who run a family business jointly, regardless of its form, the divorce of entrepreneurs will usually have a huge impact on this activity.

The property regime determines the state after divorce

The situation of spouses - entrepreneurs after divorce - to a large extent depends on the decisions made by the spouses during the marriage or before its conclusion. During their marriage, the engaged couple or spouses may decide on the property regime that will apply to their marriage. The provision of art. 31. § 1 of the Family and Guardianship Code
Upon the conclusion of the marriage, a joint property arises between the spouses by the law (statutory community), including property acquired during the marriage by both spouses or by one of them (joint property). Property items not covered by the statutory community belong to the personal property of each spouse.

The basic property regime is joint property. If the spouses do not make any other decision, this is the system that will apply to their marriage. Joint property means that - according to the general rule - everything that the spouses acquire during the marriage belongs to the joint property of the spouses. There are exceptions to this rule, set out in the Family and Guardianship Code, regarding, for example, items from a donation or inheritance, which are part of the property of a separate spouse. The spouses may also decide to introduce a different regime in the form of a contract concluded before a notary public:

  • extended community of property;

  • property separation;

  • property separation with the equalization of achievements.

Undoubtedly, the most popular of the contractual regimes is the property separation system, in which the spouses have no joint property at all, but only completely independent separate assets.

In the case of separation of property, divorce does not, in principle, have any consequences in the sphere of property of the former spouses. If the spouses owned shares in a commercial company or were partners in a civil partnership, the divorce decree will not affect their activities.

Divorce of entrepreneurs - the division of property will decide the fate of the enterprise

In the case of joint property, which is undoubtedly the dominant marriage system in Poland, the fate of the property after divorce looks more complicated. All assets acquired jointly by the spouses during the marriage constitute the so-called joint ownership. It is a specific type of joint ownership, the essence of which is based on the inability to distinguish shares in the property. Each of the spouses, as it were, has the entirety of a given asset, and it is impossible to divide the property during this type of joint ownership. After the divorce is adjudicated, and more precisely when the divorce decree becomes final, joint ownership changes its character and transforms into joint ownership in fractional parts. Usually, the former spouses will have equal shares (in part), but in proceedings for the division of joint property it is possible to establish that the shares are not equal and amount to, for example, ¾ to ¼. If the former spouses do not agree on how to divide the property on their own, it will be necessary to proceed with the division of property after the divorce.Proceedings of this type are conducted by the district court of the place where the property is located in a non-contentious manner, which means that it will end with the issuance of a decision. The division of property may take place in various ways depending on the type of property owned and the positions of the parties - the court may decide, among others on the allocation of components to the property of one of the spouses and the obligation to pay the other spouse or on the sale and distribution of the amount obtained in this way.

Start a free 30-day trial period with no strings attached!

The components that were acquired during the marriage to the joint property will be subdivided. In the case of other assets included in the spouses' separate property, it is possible to settle the outlays from the joint property to the separate property.

The task of the court in proceedings for the division of joint property is to determine the composition and condition of the property which constitutes the joint property of the former spouses. If the joint property includes an enterprise, the court will be obliged to include this asset on the list of joint property and divide it accordingly. It is worth remembering that in accordance with the established jurisprudence of the Supreme Court, the condition of the joint property of the ex-spouses is determined according to the time of the cessation of the commonality, while the value - according to the prices at the time of the division. The condition of the property means the composition of the property, and not the condition of its individual items (see the resolution of the full Civil Chamber of the Supreme Court of December 15, 1969, issued in the case No. III CZP 12/69). In practice, this means that if the former spouses delay the division of property, its value - and the amount of repayments and subsidies - may significantly change.

Economic activity is included in the joint property

One-man business is an extremely popular type of enterprise. As the name suggests, this type of enterprise is run by only one person, in the case of spouses - by one spouse. Even if the other spouse performs certain activities for this enterprise and participates in the business, formally the owner of the enterprise can only be one person. Contrary to popular belief, in the event of a divorce of a person who conducted a sole proprietorship on his own account, his enterprise will be divided in the course of proceedings for the division of joint property. Attention!
An enterprise conducted as a sole proprietorship by one of the ex-spouses is subject to settlement in the course of proceedings for the division of joint property as a component of joint property.

If the enterprise was established in the course of joint property (after marriage or after concluding an appropriate marriage contract), then the entire enterprise is included in the joint property. If an entrepreneur uses his personal assets (e.g. real estate inherited or acquired before the wedding) in running a business, these values ​​will have to be deducted from the state of the enterprise. It is worth remembering that in a case for the division of joint property, the court divides only the assets, however, the amount of liabilities will be taken into account when making the settlement. Therefore, if the ex-spouse's business has significant debts, there is generally no point in dividing this asset.

If the value of the enterprise, as well as the value of other assets, raises a dispute between the parties, the court will admit evidence from an expert opinion, which will evaluate the enterprise and its components, as well as the possible profit.

Economic activity is very often related to the personal characteristics of the entrepreneur. Intangible assets of a company, such as its clientele and reputation, are marked with a term goodwill. Important!
According to the case law of the Supreme Court, if high income from business activity was achieved thanks to the individual characteristics of the entrepreneur and the entrepreneur cannot use these factors due to illness, it is reasonable to ignore the factor in the valuation of the enterprise. goodwill (see the decision of the Supreme Court of February 3, 2016, issued in the case V CSK 299/15).

If the entrepreneur operates under a civil law partnership, then the divorce does not constitute grounds for dissolving the business activity. The contribution made to the civil law partnership will be settled in the course of a case for the division of joint property, if it was covered from the joint property of the spouses. Resolution of the Supreme Court of September 15, 2004, issued in case no. III CZP 46/04
A claim for covering the contribution of one of the spouses in a civil partnership with funds belonging to the joint property is subject to settlement pursuant to art. 45 k.r.o., used by analogy.

Joint shares, only one partner

In the case of spouses who own shares in a limited liability company, the situation between the former spouses after the divorce is different, and the relationship of partners in the company is different. If the shares were acquired with funds from the joint property, then they constitute a component of the joint property and therefore will be settled in the course of the division of the joint property. The Supreme Court accepts, however, that only one spouse - the one who participated in the acquisition of shares - is a partner in a limited liability company (see the judgment of the Supreme Court of May 20, 1999, issued in the case No. I CKN 1146/97). ). This circumstance is significant for the relations prevailing in the company, but has no impact on the result of the division procedure. A former spouse who is not a partner in the partnership may request a joint award of shares for its sole ownership in the application for division of property.