Last updated at 11:37, Tuesday, 20 November 2012

KATE JONES is an associate solicitor in the employment and commercial department at Livingstons. Please contact her for a free initial consultation at k.jones@livingstons.co.uk or 01229 585555.

KATE JONES

Q My wife and I have run our own business for 18 years. We do not have a company.

We invested all our savings to set up the business and it has been successful. Our daughter works for us and she is engaged. Our hope for the future is to retire and leave our daughter to run the business.

We have concerns about involving our future son in law in the running of the business because he has already been married and divorced before.

We want to ensure the business stays in the family and that it continues, whatever happens in their relationship.

At the moment we do not have any formal agreements between the family about the running of the business.

We would like to know our options for giving our daughter and future son in law a share in the running and ownership of the business.

A You are right to think ahead and start planning for the future now.

At the moment you and your wife are a partnership. You could ask your daughter and/or her fiancé to become partners too.
I would strongly advise you to get a partnership agreement drawn up to cover each partner’s rights and responsibilities.
In the absence of such an agreement, the default provisions of the Partnership Act of 1890 would apply to the business – and this would almost certainly mean that things were not organised as you would like them to be!

You could also consider becoming a limited company. The main benefit is limited liability – unless you expressly agree otherwise and provided you act legally, your personal assets would not be at risk if anything went wrong.

You could also arrange matters so as to deal with your concerns about your daughter’s partner.

For example, you and your wife could remain as the owners (shareholders) of the business and only appoint your daughter and her fiancé as directors for the time being, perhaps until such time as their relationship becomes more established.

I would advise you to contact us now for an initial, free of charge consultation so we can discuss your options further.

• If you have any business or employment queries please email Kate at k.jones@livingstons.co.uk.

First published at 11:35, Tuesday, 20 November 2012
Published by http://www.nwemail.co.uk