Family law for business owners

Dutch family law affects a business owner mainly through three routes: the matrimonial property regime, the prenuptial agreement and maintenance. For marriages since 1 January 2018 a business you founded before the marriage stays your own, but the profit and value it gains through your work during the marriage can still have to be shared; the main exception is an unperformed settlement clause in prenuptial conditions, which can bring the whole business into the settlement.

Family law usually reaches the business at the worst possible moment: a divorce, a death or a dispute with a co-shareholder. This article explains what Dutch law says and what you can arrange beforehand.

Koji se režim bračne imovine primjenjuje na vaše poslovanje?

That depends on the date of your marriage or registered partnership. Since 1 January 2018 the default is the limited community of property (beperkte gemeenschap van goederen) under Article 1:94 of the Dutch Civil Code (BW); before that date it was the general community of property.

In the limited community, assets you owned before the marriage, and gifts and inheritances, remain private. Everything acquired during the marriage falls into the community. A registered partnership is treated the same way as a marriage.

A business you own privately can still cost you money on divorce. Under Article 1:95(2) BW the community is entitled to reasonable compensation if you worked in your private business during the marriage without adequate pay for that work. Profit you retain in the company instead of paying it out is often where this discussion starts.

If you married before 1 January 2018 without prenuptial conditions, the general community applies. The business, or your shares in it, then belongs in principle to both spouses and is divided in equal shares on divorce.

How do prenuptial conditions protect the business?

Prenuptial conditions (huwelijkse voorwaarden) exclude the community and can keep the business separate, but only if they are drawn up by notarial deed and actually performed. The deed is registered in the public matrimonial property register (huwelijksgoederenregister) at the district court.

Many entrepreneurs have a periodic settlement clause (periodiek verrekenbeding): each year, unspent income is shared between the spouses. If the couple never actually settles, Article 1:141(3) BW presumes that all assets present at the end of the marriage were formed from income that should have been settled. That presumption frequently includes the business, unless you can prove otherwise.

The answer is practical: settle every year, record the settlement in writing and keep the records with the annual accounts. Alternatively, ask a notary to amend the prenuptial conditions during the marriage; that requires both spouses and a new notarial deed.

What about your co-shareholders?

Your co-shareholders have no say in your divorce, so arrange the consequences in advance. In a private limited company (BV), the articles of association can contain a transfer restriction (blokkeringsregeling) under Article 2:195 BW, and a shareholders’ agreement can oblige a shareholder to offer the shares to the others on divorce or death.

Without such a clause, your former spouse or heirs can end up with a claim on the value of the shares, or with the shares themselves. A clear valuation method in the shareholders’ agreement prevents a second dispute about the price.

One more rule is relevant during the marriage. Under Article 1:88 BW a spouse needs the other spouse’s consent for a surety (borgtocht), but not if a director or majority shareholder gives it in the normal course of business of the company. Banks know this rule; check it before you sign.

How is maintenance calculated for an entrepreneur?

Maintenance is based on need and ability to pay, and for an entrepreneur the ability to pay is derived from the accounts. Courts usually look at the average profit or income over several years, often the last three, so the way you draw profit from the business has direct consequences for both parties.

Child maintenance (kinderalimentatie) is owed until the child turns 21, under Article 1:395a BW. Partner maintenance (partneralimentatie) for divorces after 1 January 2020 lasts at most five years, or half the length of the marriage if it lasted less than ten years.

There are exceptions. If you have children together, partner maintenance continues until the youngest child turns 12. After a marriage of more than 15 years it can continue until the recipient’s state pension (AOW) age if that is within ten years, or for ten years if the recipient was born on or before 1 January 1970.

What should you check as the entrepreneur?

Which regime applies: the date of the marriage and any prenuptial conditions.
Whether a periodic settlement clause has been performed every year, with written proof.
Whether your salary from the business is in line with market rates, given Article 1:95(2) BW.
Whether the articles and shareholders’ agreement regulate divorce and death of a shareholder.
Whether your income figures for maintenance reflect several years, not one exceptional year.

What should you check as the spouse of an entrepreneur?

Whether the business was founded before or during the marriage.
Whether a settlement clause was performed; if not, Article 1:141(3) BW may help you.
Whether profit was retained in the company instead of paid out as income.
Whether you are entitled to compensation for the community under Article 1:95(2) BW.
Which exception to the five-year limit for partner maintenance applies to you.

What can we do for you with family law and your business?

Naši obiteljski pravnici work together with our corporate lawyers on these files:

We review your prenuptial conditions and check whether a settlement clause has been performed.
We calculate the settlement claim and the compensation under Article 1:95(2) BW.
We draft divorce and death clauses for the shareholders’ agreement.
Izračunavamo dijete and partner maintenance based on the business accounts.
We negotiate the divorce settlement and conduct proceedings before the district court.

Rezime

Since 1 January 2018 the limited community of property applies; a business owned before the marriage remains private.
The community can still claim compensation for your work in a private business (Article 1:95(2) BW).
An unperformed settlement clause can bring the whole business into the settlement (Article 1:141(3) BW).
Regulate divorce and death of a shareholder in the articles and the shareholders’ agreement.
Partner maintenance lasts at most five years, with exceptions for young children and long marriages.

Često postavljana pitanja

Is my business shared on divorce in the Netherlands?

For marriages since 1 January 2018 a business you owned before the marriage stays private, but the community can claim compensation for your work in it (Article 1:95(2) BW). For earlier marriages without prenuptial conditions, the business is in principle shared equally.

What happens if we never performed our settlement clause?

Under Article 1:141(3) BW all assets present at the end of the marriage are presumed to have been formed from income that should have been settled, unless you prove otherwise. This can include the business.

How long do I have to pay partner maintenance?

For divorces after 1 January 2020, at most five years, or half the length of a marriage shorter than ten years. Exceptions apply if you have children under 12 or after a marriage of more than 15 years.