How business and other commercial partnerships are addressed in relationship property matters...

Relationship property law provides a framework for addressing business partnerships when dealing with the issue of division of relationship property. The focus of the law is to ensure fair division of property considering the individual contributions and intentions of the parties involved.

Broadly speaking, the same general rules apply to property that belongs to a partnership as they do to other property that is purchased after the commencement of a marriage, civil union, or de facto relationship.

The assessment of partnership property depends on the classification of the property upon the date of separation. Classification of property simply refers to whether the property can be considered separate or relationship property. This is relevant for division, where the general rules and principles of relationship property law apply to property classified as relationship property.

The law sets out different rules for defining this property that help to determine how it should be divided. How each asset and liability was used, and how they were obtained within the partnership aids in determining whether the property is separate or relationship property for the purposes of division.

Partnership property is considered relationship property if it was acquired for the common use or benefit of both partners. The interest in the partnership may be treated as separate property if it predates the start of the relationship and has not been intermingled with relationship property.

Partnership agreements’ terms can also matter when relationship property is being divided, because they may affect whether certain property is treated as separate property or relationship property.

If an agreement clearly says the couple is choosing different rules from the usual relationship property law, and it has been completed properly, the agreement may be legally enforceable. If that is the case the agreement can change how some property is classified and may take priority over the usual rules of relationship property law.

If the partners own shares in a company, the rules of relationship property focus on the classification of those shares, current accounts, and other individual rights in or against the company.

The assets of a company are not considered by the law for the purposes of determining relationship property. However, changes in the value of shares of the company due to the contribution of a partner during the relationship may be considered relationship property.

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