What have many self-employed in common? Often the answers are: They have a lot of money. They have expensive homes, cars, and watches. They are constantly on vacation. That’s all true. But another similarity is that many self-employed have a divorce. However, they are not alone. About 81 million people live in Germany. Nearly 50 percent of those are married. If one now looks at the divorces, the rate was 43.06 percent in 2014. In England, the situation is more or less the same. Today, there are around 53 million people. The divorce rate was nearly 47 percent in 2009. For the avoidance of doubt, a divorce of an entrepreneur is not a special type of divorce. However, it can become a real threat to the continued existence of a company.
Writing Assignment
COMPANY LAW / ECONOMIC LAW / FAMILY LAW
The divorces of entrepreneurs in Germany and England
What have many self-employed in common? Often the answers are: They have a lot of money. They have expensive homes, cars and watches. They are constantly on vacation. That’s all true. But another similarity is that many self-employed have a divorce.1 However, they are not alone. About 81 million people live in Germany.2 Nearly 50 percent of those are married.3 If one now looks at the divorces, the rate was 43.06 percent in 2014.4 In England, the situation is more or less the same. Today, there are around 53 million people.5 The divorce rate was nearly 47 percent in 2009.6 For the avoidance of doubt, a divorce of an entrepreneur is not a special type of divorce. However, it can become a real threat to the continued existence of a company. The equalization of surplus in the course of marriage is an economical explosiveness. For entrepreneurs, the divorce seems to be the worst nightmare. In many cases, a company must cease operations because the amount of alimony and equalization of accrued gains has the entrepreneur simply overwhelmed financially. This is especially true if the bank rejects accommodations and other financial resources are not available. Then is not only marriage, but also the company at the end.7 For this reason, it is important to have a competent lawyer. Family lawyers or commercial lawyers are well suited for these cases. The economic law is the totality of all private law, criminal law and public Writing Assignment law standards and actions. The state regulates the legal relationships between the concerned parties who taking part in the economic life. The legal relationship with the state also plays a role.8 Family law is a branch of civil law, which regulates the legal status of persons connected by marriage, civil partnership, family and relatives.9 In this paper I will compare the similarities and differences between England and Germany concerning economic law, company law and family law. The comparison is interdisciplinary. We consider two divorces, an entrepreneur from Germany who is getting a divorce and an independent investment banker from London.
We take the example of an entrepreneur from Germany, which is a family member. With his brother together, he has two companies. On the one hand a company with limited liability and on the other hand a company constituted under civil law. This entrepreneur was married three times. The first two distinctions passed without problems because the women did not have competent lawyers. Now is this businessman in front of his third divorce. The third wife has instructed an excellent lawyer at a large corporate law firm in southern Germany. He has instructed a lawyer who only has a small firm and is usually responsible for labor law in the middle of Germany where he lives. The reason for the separation was his cheating with an older woman, a friend of his solicitor. He had met her on holiday in Sri Lanka. What does this mean in general?
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Under German law, a divorce is possible after one year separation period when both spouses agree or the marriage has broken down. Separation means mainly the spatial separation, as the dissolution of a joint domicile. The reasons that led to the failure of the marriage are not relevant for the German judge. The marriage can be dissolved even before the separation year. This is the case if the maintenance of the marriage is unacceptable for one of the spouses, for example in cases of domestic violence. However, that is not the case here. In England this is not quite so simple. Here the marriage must have lasted at least one year. In addition, a good reason for divorce must be proved. There are only five recognized grounds for divorce, such as adultery or domestic violence. Otherwise, a divorce is not an option, even though both want to divorce. In addition, the marriage can be dissolved if the partners are separated for two years and both want to divorce. Only after five years of separation time, the marriage can be dissolved without any special reason. Even against the will of the partner.10
In Germany the division of the existing assets depends on the marital property in which the spouses live. Through agreements couples can regulate and modify the property consequences of their marriage in many ways. If a couple has agreed separation of property, there are no pecuniary compensation claims. This is the easiest case in a divorce. However, the majority of couples living without a marriage contract in a community of accrued gain. In the case of divorce, it is determined how much assets each spouse has accumulated during marriage. If one spouse has built more wealth than the other, the partner with less wealth gets the half of the difference. Gifts and legacies are left out. In England it is different. Marital property does not exist. In recognition of contracts, there are problems. Only under certain conditions, the Writing Assignment agreements are recognized. In England the equality principle is important. Equality does not automatically mean that half of the assets will be divided. The division of property based on the following criteria: age, standard of living and ability to work. These are individual decisions. The decision is unpredictable.11
What about the alimony? In Germany there are different rules. The amount of maintenance is dependent on many factors, such as age, illness or marital roles. A prediction is difficult, but an order of magnitude can be estimated. In England, it is not sharply separated between property disputes and alimony. It may be that a spouse must pay the other spouse money. However, it need not be. The English judge can reject alimony. This is the case if he believes that the division of assets is sufficient.12 13
In Germany, the pension rights adjustment is a standard of divorce proceedings. But there is also the possibility to exclude the pension rights adjustment by a marriage contract or a divorce settlement. The retirement pension expectancy that a spouse has accumulated during the marriage, are transmitted in half on the other spouse. This means that in case of divorce, each spouse receives and emits pension rights. England has also a pension rights adjustment. It depends on the reasons of equity. Therefore, there is not always a pension rights .13 adjustment.
In England and Germany, both parents have the joint custody. A divorce does not change that. Personal contact with the child is similar in both countries.14
Besides, it is also interesting how much a divorce will cost. Both sides have to pay their Writing Assignment lawyers and the court. The costs depend on the amount in dispute. In Germany, there are legal standards for the compensation of lawyers. If the amount of dispute is high, the lawyer’s fees and the court costs are also high. It has become a part of everyday life that a client and an attorney have an additional compensation agreement. This means that the hourly wage of a lawyer is raised.15 This applies to England and Germany. When the investment banker gets divorced in London, he has to dig deep into his pocket. The costs of a divorce lawyer in England are between 600 to 800 pounds per hour.16 17 For comparison: In Germany, a competent divorce lawyer costs 250 to 450 euro per hour.
In England, the models of remuneration of an independent investment banker are very complex. To calculate the bonus payments, the court must appoint external consultants, like doctors in the field of mathematics and physics. This is not a job for mere mortals or lawyers.
In our example from Germany, this means: The corporate investments must be calculated by a financial mathematician. The judge is responsible for the commissioning of experts. As I know, an expertise costs between 1.500 and 5.000 euro. The investment banker from London has to pay 400 to 500 pounds per hour. The experts calculate what you have to pay in case of divorce.18
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In conclusion one can say that divorces of entrepreneurs without a marriage contract are a bad raid for their assets. This is the case in Germany and in England. It's striking that the divorce rate in both countries is almost the same, although the rate in England is slightly higher. Besides in England the requirements for a divorce are higher as in Germany. In England you need a good reason for a divorce. In Germany, the year of separation is enough. There are differences in contracts between spouses. In Germany marriage contracts are recognized. In England it is not or only rarely the case. Another difference is that in Germany, the alimony is separated from the assets. In England it is different. Here, the alimony can be omitted completely. The pension rights adjustment is a standard in Germany. Because of the reasons of equity in England is not always a pension rights adjustment. Between England and Germany there is no difference in the custody of a child. The costs of a divorce lawyer are high in both countries. England and Germany have similar payment models. In England the hourly rate for a solicitor is a little bit higher. The same applies to the costs of an expertise. But there are exceptions because the amount of controversy is also important for the costs. In my opinion, a divorce in Germany is better than in England. In Germany it is possible to exclude titles by a marriage contract. This is more difficult in England.
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- Citar trabajo
- Kevin-René Schilling (Autor), 2016, The divorces of entrepreneurs in Germany and England, Múnich, GRIN Verlag, https://www.grin.com/document/1296655
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