Partner in family business past 15 years...

Asked by Yustine on 10-03-2021 22:49:15
Question posted in the Family Law category relating to Mpumalanga

Partner in family business past 15 years.  Husband started a smallholding farming business, against my will, persuaded me to help with start up capital, his finance application at the Bank basically approved, just short term.  Large amounts paid to his contractors etc but the Bank never came through.  He was told to stop after the Chicken Coups, and continue with that untill he can sustain the new business, ignored me, continued to draw and pay expenses from business account.  Business is under huge financial pressure due to his ignorance to stop spending.  Stress flowed over to marriage, constant conflict, he abandoned his responsibilities in the family business and left me and 2 adult children to run business alonefor more than a year. Business is struggling due to cash flow stress, he moved out of the house, left me with all the responsibilities of business and household, as well as 1 minor child still in school.  Approached me recently for first time in months, wants to sort out the business problems, did not know it was this bad, and presented suggestions to cut cost, all well, all for it, but want to force me to take responsibility for the HUGE Bond repayment, all household expenses, living cost, minor child education etc AND wants to force me to cancell my Pension and Medical Aid by giving me an Allowance that is not nearly enough to cover all my costs, unless I cancell all my Life Insurance for my kids, my pension and my medical aid.  I need help plse.  He is trying to get rid of me, get me out of the business and dump all his financial responsibilities on me and my kids.

Answer to the Question

Posted by Att. Patrick on 11-03-2021 09:51:16

Hi there and thank you for your question, 

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow-up questions in order to clarify your question. If you have a new question, you must please open a new thread. 

I don't think that you should allow him to come back into the business because you've basically taken it all over. What he is trying to do is not right or ethical. You can't allow him to dictate the terms on which he is possibly going to come back, and you can't let him get you to cancel your pension, life insurance, and medical aid, etc. 

You also need to realise that he can't just lump the debt onto you! He is trying to get back into the business while trying to escape the debt. Not good!

From a legal point of view, it does make a difference if the business is operated in your husband's name or in a company/close corporation because if it was in your husband's name and you guys are married in community of property, then you have a right to the business. 

If it was in a company name, then what you would have done is to loan your personal funds to this company to use. This means that you wouldn't have a direct claim to the business, rather a claim against the company for the return of your loan.

I think that you guys should go see your accountant or business advisor to assist you in getting the busines running properly and get your financial affairs into order. It could do you well!

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question. 

Att. Patrick 

Please remember this is a dialog if you have follow-up questions please use the REPLY button and ask. If I did not answer the question you thought you were asking, please respond with the specific question you wanted to be answered. I hope you found my answer helpful, and you have finished asking your questions, please click on the GREEN ACCEPT button in order to mark the question as closed.

Information provided by client

Business that was robbed belongs to me and my husband and son. Farm in his name, T/A, married in community. How can I prevent him from coming back to our business if he is a member of the CC? How can I force him to allow me access to his Farm's finances and records? How can I force him to pay allowance for our child and Medical Aid and Pension? He is a narcissist and very agressive, short temper and using bullying tactics to turn my son against me and trying to blindside me in business, by making one-sided decisions and not involving me in the process.

Answer to the Question

Posted by Att. Patrick on 11-03-2021 14:15:09

If you are married in community of property, then there is a single joint estate comprising all assets and the business. You would have a claim to half of the joint estate, and he would have a claim to half of the joint estate. 

Any debt that you take out "in your own name" would be debt belonging to the joint estate - so in effect, half of the debt is already his. 

Q: How can I force him to allow me access to his Farm's finances and records? --> If he doesn't agree to give you access, your only route would be to bring a court application to allow you access. There isn't any other way. 

Q: How can I force him to pay allowance for our child and Medical Aid and Pension? --> You would only be entitled to apply for maintenance if you were in the process of getting divorced. Until then, you can't force him to contribute towards your child or other expenses. Only once you've started divorce proceedings. 

He is a narcissist and very agressive, short temper and using bullying tactics to turn my son against me and trying to blindside me in business, by making one-sided decisions and not involving me in the process. --> You must not let him bully you. If he is aggressive, you can apply at SAPS for a domestic violence protection order so as to ensure that he doesn't harm you or your family! 

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