In this video with Marcus Bäckström from Enkla Juridik, you can find out more about family law for entrepreneurs.

Contact Marcus and his colleagues if you are in need of legal advice.

kontakt@enklajuridik.se
020 - 89 95 96
Enkla Juridik Sverige AB
Industrivägen 23
171 48 Solna

Transcription of the movie

What family law rules are important to consider?

Most fundamentally, if you run a business and are married, without having a prenuptial agreement, the shares in the business are marital property. This means that if you separate or die, the main rule is that the shares should be included in a division of property. In practice, this means that you would have to share your company. This also has consequences for other stakeholders in the company. So that's the most important thing to understand.

Like a car, money in an account or real estate, your own business is also part of the community of property.

How to proceed?

It's actually very simple. Of course, there are lawyers who charge good money for it. But basically, all you have to do is write a document stating that you do not want the division of property rules in the Marriage Act to apply. Then it can be any property. That no matter what, it should not be included in a future division of property. In that case, there will be no division of property either, because there is nothing to divide. Or you can make a list that the shares in, for example, Nisses Måleri AB are exempt from division of property. So it can refer to everything you own or just a part.

It must then be signed by each spouse. It must also be registered with the Swedish Tax Agency to be valid and it costs SEK 275 or similar in administration fees. So it's not a high threshold to arrange this, so to speak.

How do you draw up a property division agreement?

It is compulsory if you are divorced and do not have a prenuptial agreement. Unlike if you are cohabiting. If you are cohabiting, you do not have to divide your property. It is only if someone explicitly requests it. But if you separate or someone dies and there is a marriage, you have to divide the property. It's really just an agreement setting out what each person has in assets and liabilities.

An oversimplified example is that a person has one million kronor in an account, but otherwise no assets at all. Nor any debts. While the other person has zero kronor and no debts. Then what is to be divided is the one million kronor in one person's account. Since the principle is that it should be divided equally, one person must transfer half of the money to the other person. Then it's really done.

But it can be extremely complicated, especially in cases where there are companies involved. Because if you have an unlisted company, which most do, then it can be a bit difficult to know what these shares are worth. It can depend on a variety of factors. It's a fairly common dispute situation, I would say.

If there is no prenuptial agreement, the person who does not own the company wants it to be valued as high as possible. While the person who owns the shares wants to push down the valuation. That could be a problem.

So if you don't own Nisse's Painting but your name is Jeff Bezos, who owns Amazon, and you're getting divorced - what advice would you give him?  

I wish I could have advised him now that he was divorced, that would have been wonderful, because I'm sure it was very well paid! But you could say that it was too late in his case. Because he started his business in the 90s and couldn't expect to become the richest person in the world, could he? It is perhaps natural that the prenuptial agreement did not slip in there.

If you find yourself in a situation where it's already too late, because you can't establish the prenuptial agreement retroactively, my advice is to be humble, compromising and constructive. Don't try to start a war with your former partner, but try to resolve it in a decent way for both parties. There you may need help to mediate a little.

In any case, my experience is that if you go in and are determined, it is often counterproductive. Because then you create a bad atmosphere and then it may take two years to solve it instead of two months.

Are there any risks in having a partner on the board of the company?

Yes, I would say so. It's very common for partners to be deputies in limited companies. Which in itself is not so bad because a deputy does not serve in the name of the company, so to speak. So it may well be possible.

I don't think you should put a partner as an ordinary member on a board, if for some reason you need several members. Because if you are a member of the board of a company, you take on quite extensive responsibility for the business. Because if you have an accident, go bankrupt and incur tax debts, it will not only affect you but also your partner.