Q. I am involved in a family business and work alongside my father and uncle, although I do the bulk of the work. We are doing well again after a number of lean years. I have always worked there on the basis that while I do the actual labor, they set up the work. It was agreed that the business would pass to me in a number of years. My long-term partner and I plan to marry in the new year. My uncle is very protective of the business and has said that he won’t pass his share of the business to me unless we do a pre-nuptial agreement. I am very taken aback by this and don’t want to start off marriage with pre-conditions. I am not sure how to proceed. The business would fold without me. Do you have any advice?
Dear Reader,
This can be a difficult situation to give advice on. Firstly, if the share of the business has been long promised to you, you may have a potential claim in Estoppell.
An Estoppell arises where a promise was made by your uncle, and you carried out acts or work in reliance of that promise to your own detriment. If you have been working at a ‘discount’ in the family business, been ignoring the possibility of other work, etc., all on the basis that the business will be yours one day then there may be a course open to you there.
It may also be the case that there is some manner of shareholders agreement in being which sets out what might happen in the event of a disagreement between your father and your uncle.
Both of the above solutions may involve litigation. In most family businesses protracted litigation would tend to be ruinous and only entertained as a last resort.
The reality of the situation is that you are a significant and important employee of the company, which is complicated by the fact that your employers are also family members. You should be entirely open with the wider family but also seek to protect your own position in the business now by way of a formal agreement as to what is to happen in the future.
If agreement cannot be reached, then you do need to consider your options moving forward. Clearly, you would not want the family business to fold, but such unreasonable demands by your family would clearly leave the business open to various employment disputes and possibly a claim in constructive dismissal.
It is important to note that so called “pre-nuptial agreements” have no legal basis in Irish law and would not be a safe way for your uncle to try and protect the family business moving forward.
If you cannot come to an agreement with your father and your uncle, then I do think it prudent for you to seek advice from your solicitor at this point.
