Understanding Your Conveyancing Documents - What is Reserve Fund?
As part of our Conveyancing Series, we continue to explore some of the key terms and documents that clients may come across during a property transaction.
Read Conveyancing Documents Series 1 – Title Guarantee
When buying a leasehold property, purchasers will usually be advised to consider the annual service charge. However, part of that service charge may be collected and set aside for future expenditure rather than spent on the building’s immediate running costs.
This money is commonly referred to as a “reserve fund” or “sinking fund”. Understanding how the fund operates, how much it contains and what it may be used for can help buyers assess the likely future costs of owning a leasehold property.
What Is a Reserve Fund or Sinking Fund?
A reserve fund, sometimes called a sinking fund, is money collected from leaseholders through the service charge and set aside for future major works. The terms are often used interchangeably, but the lease should be checked to confirm how contributions may be collected and spent.
What Can the Fund Be Used For?
Reserve funds are generally used for major or non-routine works that may only be required every few years. Depending on the building and the terms of the lease, the fund may be used for:
- roof repairs or replacement;
- internal or external redecoration;
- structural repairs;
- replacement of communal carpets;
- lift repairs or replacement;
- replacement of communal boilers or heating systems; and
- other major works affecting the building or estate.
Day-to-day costs, such as cleaning, gardening, buildings insurance and management fees, are normally paid from the annual service charge budget.
Does Every Leasehold Building Have a Fund?
Not every leasehold development has a reserve or sinking fund. Contributions can generally be collected only where the lease permits them, and the lease should explain how the fund may be used.
The lease may specify the annual contribution or allow the landlord or managing agent to determine a reasonable amount based on anticipated future expenditure and the amount already held. The contribution will therefore vary between developments.
Where major works are proposed, the landlord may be required to consult leaseholders under the statutory Section 20 procedure, even where some or all of the cost will be paid from the reserve fund.
What Are the Benefits of a Reserve Fund?
A properly managed reserve fund can help spread the cost of major works across a number of years.
Without a reserve fund, leaseholders may face a substantial one-off service charge demand when major repairs or replacement works are required. A reserve fund helps spread these costs over time and makes future expenditure easier to plan for.
However, the existence of a reserve fund does not guarantee that all future works will be fully covered.
For example, if major roof repairs are expected to cost £100,000 but the reserve fund contains only £60,000, the leaseholders may still be required to contribute towards the £40,000 shortfall through an additional service charge demand.
How Is the Fund Held and What Happens on Sale?
For private-sector leasehold properties, reserve fund contributions must generally be held on trust for the benefit of the leaseholders and kept separately from the landlord’s own money. The fund may only be used for purposes permitted by the lease, and any interest earned will usually be added to the fund.
Leaseholders may be entitled to request information about the fund, including contributions received, expenditure and the remaining balance.
When a leaseholder sells the property, they will not usually receive a refund of their contributions unless the lease provides otherwise. The money normally remains in the fund for the future maintenance of the building, with the incoming buyer benefiting from the existing balance.
What Should a Buyer Check?
As part of the conveyancing process, the buyer’s solicitor or conveyancer should review the lease, service charge accounts and information provided by the landlord or managing agent.
Key points include:
- whether the lease allows reserve fund contributions;
- the current balance and annual contribution;
- any recent expenditure from the fund;
- whether major works are planned;
- whether the fund is likely to cover those works; and
- whether additional payments may be required.
A low service charge is not always beneficial if little or no money is being set aside for future major works. Equally, a higher service charge may reflect responsible long-term planning.
Conclusion
Reserve and sinking funds can help spread the cost of major works and reduce the risk of unexpected service charge demands. Buyers should carefully review the lease, the amount held and any planned works before proceeding with a leasehold purchase.
Our experienced conveyancing solicitors can guide you through each stage of the transaction, explain the relevant leasehold information clearly and advise on any potential concerns. We assist clients in English, Mandarin and Cantonese.
Divorced but still financially connected? Why a Final Order may not be the end
A divorce may legally end a marriage, but it does not automatically bring the parties’ financial relationship to an end.
Unless financial arrangements are recorded in a court-approved order, a former spouse may retain the ability to make a financial claim years or even decades after the divorce was finalised. In some circumstances, unresolved financial ties may also allow a former spouse to pursue a claim against an estate after death.
The Telegraph recently reported that 105,704 divorce orders were granted in England and Wales during 2025. However, research cited in the article suggested that only around one-third of divorcing couples use the legal system to formalise a financial settlement.
Does the Final Order end financial claims?
The Final Order, formerly known as the Decree Absolute, legally ends the marriage and allows both parties to remarry or enter a new civil partnership. However, the Final Order does not, by itself, dismiss financial claims arising from the marriage. Claims concerning property, savings, pensions, income and lump‑sum payments may remain open unless they have been resolved through a financial order (often a consent order) approved and sealed by the family court.
Parties should therefore deal separately with their financial arrangements and consider applying for a financial order to record any divorce financial settlement. Where appropriate, a clean break order (usually a clean break clause within a consent order) can prevent former spouse from bringing further financial claims against the other in the future. Even where the parties have divided their property informally and consider the matter settled, a private agreement between them will not usually provide the same protection as a sealed court order.
A claim more than 20 years after divorce
The risks associated with failing to formalise a financial settlement were illustrated in Lin v Par [2025] EWFC 401.
The parties had divorced more than 20 years before the financial proceedings came before the court. A draft consent order had been prepared at the time of the divorce, and the parties had acted on the basis that their financial affairs had been resolved. However, the draft order had never been approved and sealed by the court.
The former wife was therefore able to bring a financial remedies application many years later.
Mr Justice Peel recognised that there is no statutory limitation period preventing a former spouse from making a financial remedies application. Nevertheless, a delay of more than 20 years was highly relevant when the court considered what would be fair.
The court concluded that the parties had reached an effective agreement and dismissed the former wife’s claims. An immediate clean break was ordered. The case nevertheless demonstrates that an apparently concluded financial settlement can return to court decades later where the necessary order was never finalised.
The practical lesson is clear: reaching an agreement is not necessarily the end of the process. The agreement should be properly drafted, submitted to the court and approved as a financial order.
The possibility of financial claims years after divorce is not confined to unusual cases. In the widely reported case of Wyatt v Vince [2015] UKSC 14, the Supreme Court allowed a former wife to pursue a financial claim more than two decades after the divorce because no court-approved financial settlement had ever been obtained. The case remains one of the clearest reminders that, in England and Wales, a divorce Final Order does not automatically prevent future financial claims by an ex-spouse.
Can a former spouse claim against an estate?
The position may become more complicated where one of the former spouses dies. Under the Inheritance (Provision for Family and Dependants) Act 1975, a former spouse who has not remarried may potentially apply for reasonable financial provision from the deceased’s estate.
Failing to obtain an appropriate financial order may leave an estate exposed to a claim long after the divorce itself.
Whether such a claim can be made will depend on the terms of any previous financial order, any section 15 / 1975 Act bar, and the particular circumstances of the parties. A properly drafted clean break order can include the dismissal of future financial claims between former spouses and can, where appropriate, limit claims under the Inheritance Act 1975, providing greater protection for both parties and their estates.
However, a clean break will not be appropriate in every case. For example, where spousal maintenance is required on an ongoing basis, it may not be possible immediately to sever all financial ties, although a partial clean break may still be achievable in relation to capital.
What happens if someone dies before the financial case is concluded?
If a party dies before a final substantive financial remedy order has been made, the financial remedy application cannot ordinarily continue either against the deceased’s estate or for the benefit of the estate. The parties’ positions will instead depend on matters such as:
- the existing legal and beneficial ownership of property;
- whether property passes automatically by survivorship;
- the terms of the deceased’s will or the intestacy rules;
- pension or contractual death benefits; and
- whether the surviving or former spouse can bring a claim under the Inheritance Act 1975.
By contrast, where a financial remedy order has already been made, certain obligations under that order may be enforceable by or against the deceased’s estate, for example arrears of lump sums or maintenance that accrued before death.
If you are interested in protecting your position post-divorce, the Chan Neill Solicitors’ Family Law team can advise on financial settlements, consent orders, clean break provisions and unresolved financial claims following divorce.
Understanding Your Conveyancing Documents - Full, Limited and No Title Guarantee
When buying or selling property in England and Wales, clients are often asked to review or sign a number of conveyancing documents. These documents can contain legal terms and provisions that are important to the transaction, but are not always easy to understand.
As part of our Conveyancing Series, we will explore some of the key documents and legal terms that commonly arise during the conveyancing process, helping buyers and sellers better understand what they are being asked to review or sign.
In this first article, we look at the difference between full title guarantee, limited title guarantee and no title guarantee, and explain why these terms matter in a property transaction.
What is Full Title Guarantee?
Full title guarantee gives the buyer the strongest level of assurance from the seller.
Where a property is sold with full title guarantee, the seller confirms that they have the legal right to sell the property and will do what they reasonably can, at their own cost, to transfer good title to the buyer.
It also implies that the property is being sold free from mortgages, financial charges and third-party rights, except for matters that have been disclosed or matters which the seller does not know about and could not reasonably be expected to know about.
If the property is leasehold, full title guarantee also gives additional assurance that the lease still exists and that the seller has complied with the lease terms.
What is Limited Title Guarantee?
Limited title guarantee offers a narrower level of protection than full title guarantee. It is commonly used where the seller has limited knowledge of the property or is acting in a representative capacity, such as an executor, personal representative, trustee, attorney, mortgagee in possession, receiver or bank.
In these cases, although the seller still confirms that they have the right to sell the property and will do what they reasonably can to transfer the title, their promises about mortgages, charges, third-party rights and other interests affecting the property are limited.
In simple terms, the seller is usually only confirming that they have not personally done anything to adversely affect the title, and that they are not aware of anything done during their period of ownership or involvement. They are not giving the same level of assurance about previous owners or historic title matters.
What is No Title Guarantee?
In some transactions, the property may be sold with no title guarantee. This is sometimes seen in repossessed property sales or sales by a mortgagee, receiver or bank.
This means the seller is not making the usual legal promises about the property’s title. For example, they may not be able to confirm whether there are unknown claims, charges, rights, boundary issues or other title problems affecting the property.
A no title guarantee sale does not necessarily mean that the property cannot be purchased. However, the buyer takes on more risk and should proceed with caution.
Before exchange of contracts, the buyer’s solicitor should carefully review the title documents, Land Registry entries, searches and any available information. If a potential issue is identified, the buyer may need to consider whether the risk is acceptable or whether indemnity insurance may be appropriate.
Conclusion
The difference between full, limited and no title guarantee can have important practical consequences in a property transaction, as it affects both the level of assurance given by the seller and the level of risk the buyer may be asked to accept. Where limited or no title guarantee is offered, buyers should seek legal advice to understand what information is available, what cannot be confirmed, and whether it is appropriate to proceed.
At Chan Neill Solicitors LLP, our Conveyancing team advises buyers and sellers on a wide range of property transactions, including matters involving limited or no title guarantee. If you are buying or selling a property and are unsure about the title guarantee being offered, please contact our team for legal advice before proceeding.
In this series, we will continue to explain key conveyancing documents and legal terms to help buyers and sellers better understand the property transaction process.
Can Anyone Become a Company Director in the UK?
Can Anyone Become a Company Director in the UK?
Becoming a company director in the UK may appear relatively straightforward, particularly as companies can now be incorporated quickly online. However, acting as a director involves far more than simply holding a title.
Directors are overseeing for managing a company’s affairs and are subject to a range of legal duties and obligations under the Companies Act 2006. Understanding these responsibilities is essential before accepting an appointment as a director.
Who Can Become a Company Director?
In the UK, most individuals can become a company director provided they meet certain legal requirements. A director must generally:
- Be at least 16 years old
- Not be disqualified from acting as a director
- Not be subject to a bankruptcy restrictions order or equivalent restrictions
- Have consented to act as a director
There is no requirement for a director to be a UK citizen, live in the UK, or hold professional qualifications. As a result, many UK companies have overseas directors and international business owners.
However, regardless of where a director lives, UK companies must continue to comply with their legal obligations, including maintaining a registered office, filing documents with Companies House, and meeting any applicable UK tax requirements.
What Does a Company Director Actually Do?
A director is responsible for managing the company and making decisions in its best interests.
This may include:
- Managing day-to-day business operations
- Entering into contracts
- Overseeing finances
- Ensuring legal and regulatory compliance
- Making strategic business decisions
- Acting in the best interests of the company
The precise authority of directors is often governed by the company’s articles of association and any shareholders’ agreement that may be in place.
Legal Duties of Directors
Under sections 171–177 of the Companies Act 2006, directors owe statutory duties to the company.
These duties include obligations to:
- Act within their powers
- Promote the success of the company
- Exercise independent judgment
- Exercise reasonable care, skill and diligence
- Avoid conflicts of interest
- Not accept benefits from third parties
- Declare interests in proposed transactions or arrangements
These duties apply regardless of whether the director is actively involved in the daily running of the business.
Can Directors Be Personally Liable?
Although a company is a separate legal entity, directors may in certain circumstances face personal liability.
Examples may include:
- Breach of directors’ duties
- Wrongful or fraudulent trading
- misapplication of company assets
- Certain statutory or regulatory breaches
In serious cases, directors may also face disqualification proceedings under the Company Directors Disqualification Act 1986.
Why Legal Advice Matters
Many business owners accept director appointments without fully understanding the legal responsibilities involved.
Seeking legal advice at an early stage can help directors:
- Understand their duties
- Reduce governance risks
- Ensure proper decision-making procedures are followed
- Protect the interests of the company
- Minimise the risk of disputes or liability
This is particularly important for start-ups, family businesses, shareholder-managed companies, and businesses with overseas elements.
How We Can Help
At Chan Neill Solicitors LLP, our corporate and commercial team advises directors, shareholders, investors, and businesses on a wide range of company law and corporate governance matters.
If you require advice regarding directors’ duties, shareholder relationships, company governance, or corporate disputes, our team would be pleased to assist.
Paralegal to Partner series: Gideon Rix
Arbitration is often described as faster and cheaper than litigation—but how true is that in practice?
In this Paralegal to Partner feature, Gideon Rix draws on a decade of experience behind the scenes of international arbitrations to offer a candid, practitioner’s perspective.
If you could give one piece of advice to your younger self at the start of your legal career, knowing what you know now, what would it be?
One piece of advice I would offer is to trust your judgment, Identify senior lawyers whose careers you wish to emulate, and learn to work exactly as they do before attempting to develop your own style.
What is one legal skill junior lawyers obsess over that matters far less than they think — and one they underestimate entirely?
I have observed that, throughout my career, junior lawyers often obsess over making their legal writing appear formal and almost Dickensian. There is a general belief that legal writing must be serious and formal in tone, and an attempt to achieve this can have almost absurd results. However, what junior lawyers frequently fail to recognize that it is far more important to write in a simple and easily understood manner.
Outside of black-letter law, what makes a genuinely excellent litigator in 2026?
I think a genuinely excellent litigator has to have some understanding of the industry in which they are litigating. It isn’t enough to just understand the law; you have to understand how your client’s business works.
Litigation over contracts is rarely going to be decided purely on the contents of a contract. It will depend largely on the industry in which that contract was signed and an understanding of how that business operates, what is standard, what is commercial, what makes sense, and what does not. A black-letter lawyer who may have a perfect understanding of the law may fail to understand that the arguments he’s making may be technically correct, but they will have catastrophic consequences for the client if they are pursued.
What case (public or personal) completely changed the way you think about litigation?
Every case I take on changes how I think about litigation. A good litigator is always learning and developing. When your understanding of litigation becomes static, you become outdated.
In terms of cases that have left a lasting impression beyond all the others, as a junior lawyer I once worked on a case in which our client, a liquidator of a company, was forced to take action the did not want to take, filing a claim against a former director who had done everything to help his former employees, but due to a legal technicality, was being pursued. All parties wished to reach some form of solution to avoid an innocent man being made bankrupt. Eventually a settlement was reached that all parties were happy with.
The lasting lesson I took away from that case, was that sometimes parties have no choice but to take legal action. Second, Parties can always settle a dispute, if there is sufficient will to do so.
Litigation Case study 1: Defending a Borrower’s Rights
Bridging Loan Dispute: Defending a Borrower’s Rights
Chan Neill Solicitors LLP acted in a complex, high-value, multi-party dispute concerning bridging finance, secured lending, and contested repayment allocations involving a London-based family home. The matter arose against a backdrop of significant financial and business pressures for a restaurateur. Following bankruptcy, director disqualification, and substantial business liabilities, the family property had been placed into trust and refinanced through a series of secured lending arrangements, personal guarantees, and bridging loan facilities. Over time, additional borrowing was undertaken to stabilise the family’s financial position.
The dispute crystallised after a substantial repayment of £1 million was made to the lender, with the intention of discharging the secured borrowing against the family home. Rather than applying the funds solely to the secured loans over the property, the lender allocated the payment across a range of unsecured debts and facilities involving third parties, relying on contractual provisions granting discretion over payment allocation.
Chan Neill Solicitors acted for the Defendant in challenging the lender’s position, advancing arguments rooted in both contract and equity. Central to the defence was the contention that the lender’s approach amounted to an unlawful interference with the borrower’s equity of redemption, raising questions as to whether contractual discretion had been exercised in a way that improperly prevented the release of security over the property. Issues of privity of contract and the propriety of allocating funds toward liabilities involving third parties also formed part of the dispute.
Alongside substantive legal arguments, the matter involved extensive procedural and disclosure disputes. Led by the Head of Litigation, Gideon Rix, Chan Neill Solicitors resisted broad disclosure requests concerning unrelated third-party arrangements while pressing for greater transparency regarding the lender’s internal decision-making and rationale behind the allocation of funds. The Litigation Team also put forward robust pleadings, amendments, and negotiated substantial extensions relating to witness evidence.
Over the course of CNS’ involvement in these complex proceedings, CNS supported productive settlement discussions, helping facilitate negotiations while protecting the client’s position through procedural safeguards and consent arrangements pending resolution. This matter demonstrates CNS’s experience in navigating sophisticated property and finance disputes involving secured lending, contractual interpretation, equitable principles, and strategic litigation management in high-value proceedings.
At Chan Neill Solicitors LLP, our Litigation team advises individuals, businesses and international clients on a wide range of commercial, property and cross-border disputes.
With extensive experience in high-value and complex litigation, we help clients protect their rights and achieve practical, commercial outcomes. We advise clients in English, Mandarin and Cantonese. Contact our Litigation team for early legal advice to help resolve your dispute effectively.
Child Custody and Child Arrangements Orders: What Parents Need to Know
When parents separate, arrangements for their children are often one of the most important issues to resolve. This may include where a child will live, how much time they will spend with each parent, and how important decisions about their upbringing will be made.
In England and Wales, these issues are usually dealt with through child arrangements, and where court involvement is needed, a Child Arrangements Order may be made.
What is child custody?
Child custody generally refers to arrangements concerning a child’s care after separation. This can include living arrangements, contact with each parent, holiday arrangements, and decisions relating to the child’s upbringing.
Child custody issues can be emotional and difficult, particularly where parents have different views about what is best for the child. Wherever possible, parents are encouraged to reach an agreement through discussion, negotiation or mediation.
What is a Child Arrangements Order?
A Child Arrangements Order is a legally binding court order that sets out arrangements for a child. It can decide:
- Who the child will live with
- How much time the child will spend with each parent
- When and how contact will take place, including phone or video contact
A Child Arrangements Order may be needed where parents cannot agree arrangements themselves, where existing arrangements are not working, or where there are concerns about a child’s welfare or stability.
When deciding child arrangements, the court’s primary consideration is always the child’s welfare. There is no automatic preference for either parent. The court will consider the individual circumstances of the case and what arrangement is in the child’s best interests.
Parental responsibility
Parental responsibility is also an important part of child arrangements. It refers to the legal rights and responsibilities a person has in relation to a child, including decisions about education, medical treatment, religion, travel and other important matters.
Having parental responsibility does not automatically mean that a child will live with that parent. Living arrangements and parental responsibility are separate issues, although they often overlap in family law disputes.
How we can help
At Chan Neill Solicitors LLP, we understand that disputes involving children can be stressful and emotional. Our family law team can provide clear and practical advice to help you understand your position and make informed decisions.
We can assist with:
- Child custody and child arrangements
- Child Arrangements Orders
- Contact and visitation arrangements
- Parental responsibility disputes• Relocation and international child arrangements
- Mediation and negotiated settlements
- Court proceedings where necessary
Our aim is to help parents reach arrangements that support their child’s wellbeing while providing clarity and stability for the family.
As a trilingual team, we provide advice in English, Mandarin and Cantonese, ensuring that clients from a wide range of backgrounds can access legal support with confidence.
If you would like to discuss child custody or child arrangements, please contact our family law team.
Received an Unclear Claim or Defence? Here's What You Can Do
In litigation, it is not uncommon for one party to feel that the other side’s case is unclear, vague, or missing important details. A claim or defence may contain broad allegations without properly explaining what is being alleged, how losses are calculated, or what factual basis the other party relies upon. In these situations, the Civil Procedure Rules (“CPR”), in particular CPR Part 18 and its Practice Direction, set out a procedure allowing parties to request clarification or additional information about matters in dispute
What is a Request for Further Information?
A Request for Further Information is a formal request asking another party to clarify matters contained in their statement of case, such as the Particulars of Claim or Defence.
Statements of case are important because they define the issues in dispute and allow each party to understand the case they must meet. Where a statement of case lacks sufficient detail, the opposing party may serve a CPR Part 18 Request seeking further clarification or information before the matter progresses further, provided this is reasonably necessary and proportionate to understanding or preparing their own case.
When Might a Request Be Necessary?
A request for further information may be appropriate where:
- allegations are vague or unclear;
- important facts or dates are missing;
- losses have not been properly explained;
- contractual terms relied upon have not been identified; or
- the defence does not clearly explain why liability is denied.
For example, a claimant may allege breach of contract without specifying which contractual term was breached or how the breach occurred. Clarifying these issues early can help narrow the dispute, avoid unnecessary costs, and assist parties in evaluating the strengths and weaknesses of the case.
Is There a Formal Procedure?
Under CPR Part 18 and Practice Direction 18, a party seeking clarification should first serve a written Request on the other side, stating the information sought and a reasonable date for a response. Requests should be concise, focused, and strictly confined to matters reasonably necessary and proportionate to prepare the requesting party’s own case or to understand the case they have to meet. If the responding party refuses to clarify their position or provides an inadequate response, the requesting party may apply to the court for an order requiring a response, but the court retains a wide discretion whether to grant such an order having regard to relevance and proportionality. Parties should therefore be cautious when making requests; overly broad or unnecessary requests may be challenged and could have costs consequences.
What Are the Limits?
A Request for Further Information is not intended to be a “fishing expedition” or a way to obtain all of the other side’s evidence before disclosure.
The court may refuse requests that are:
- overly broad;
- disproportionate; or
- unnecessary for resolving the real issues in dispute.
Careful drafting and strategic consideration are therefore important.
Conclusion
Requests for Further Information can be an important procedural and strategic tool in litigation. They may help clarify the issues in dispute, identify weaknesses in the opposing party’s case, and avoid unnecessary delays or costs later in proceedings.
However, deciding whether a request is appropriate, how it should be drafted, and how to respond to requests from the opposing party often requires careful legal and tactical consideration.
As a multilingual law firm, Chan Neill Solicitors LLP regularly advises UK and international clients on commercial disputes, civil litigation, and court proceedings. Our experienced dispute resolution team provides strategic and commercially focused advice at every stage of a claim.
If you require advice on a dispute or have received court documents, please contact our team to discuss your matter.
Shareholder vs Director: What’s the Difference?
In many UK companies, particularly smaller or owner-managed businesses, the terms “shareholder” and “director” are often used interchangeably. However, they perform very different roles within a company.
Understanding the distinction between shareholders and directors is essential when dealing with company governance, decision-making, legal responsibilities, and shareholder disputes.
Shareholders
A shareholder is an owner of the company. Shareholders hold shares in the business and may benefit from the company’s success through dividends or an increase in share value.
Depending on the type and number of shares they hold, shareholders may also have voting rights on important company matters.
Shareholders are not usually responsible for the day-to-day management of the company. Instead, they generally exercise influence through ownership rights and voting powers.
Directors
A director, on the other hand, is responsible for managing the company’s affairs and day-to-day operations.
Directors make strategic and operational decisions on behalf of the company. This may include:
- entering into contracts;
- managing employees;
- overseeing finances;
- ensuring regulatory compliance; and
- acting in the company’s best interests.
Directors owe legal duties to the company under the Companies Act 2006, including duties to:
- act within their powers;
- promote the success of the company;
- avoid conflicts of interest; and
- exercise reasonable care, skill and diligence.
Can Someone Be Both a Shareholder and Director?
Yes. In many private companies, particularly family businesses and start-ups, the same individual may act as both a shareholder and a director.
However, ownership and management remain legally distinct concepts.
For example:
- a shareholder owns part of the company;
- a director manages the company.
An individual acting in both capacities should understand the separate rights and responsibilities attached to each role.
A clear understanding of the distinction between shareholders and directors can help businesses maintain effective corporate governance and reduce the risk of internal disputes.
At Chan Neill Solicitors LLP, our corporate and commercial team advises businesses, directors, and shareholders on a wide range of company law matters, including shareholder agreements, directors’ duties, and corporate disputes.
The legal side of love: what you should know about prenuptial agreements
What is a prenup:
In the England and Wales, a prenuptial agreement (“prenup”) is an agreement entered into by couples before marriage or civil partnership that sets out how they intend their assets and income to be dealt with if the relationship later breaks down. It typically records the assets that each party brings into the relationship and explains how those assets, and sometimes future assets or income, should be treated if there is a separation, divorce or dissolution. Survey research by Marriage Foundation suggests that around one in five couples who marry in the UK have signed a prenup, indicating that these agreements are becoming more common, although there is no official government statistic on this point.
Legal status of prenups in the UK
Currently, the legal approach to prenuptial agreements in England and Wales largely follows the Supreme Court decision in Radmacher v Granatino.
When deciding how assets should be divided on divorce, the court must consider all the circumstances of the case under section 25 of the Matrimonial Causes Act 1973. A prenup is one factor the court may take into account, but it cannot remove the court’s overall discretion to reach a fair outcome.
Although prenups are not automatically legally binding in the same way as ordinary commercial contracts, the courts will often give significant weight to them where:
- both parties entered into the agreement freely;
- both understood the implications of the agreement; and
- it would be fair to uphold the agreement in the circumstances.
The Law Commission has also recommended the introduction of “qualifying nuptial agreements”, which could make prenups legally binding if certain safeguards are satisfied.
Three common reasons why couples are hesitant to get prenups
- Prenups are reserved for the high-net-worth individuals or celebrities:
Despite portrayals in popular culture and the tabloids, prenups aren’t just for the rich and famous. In England and Wales, with the median marriage age now around 31, many couples enter marriage with assets from careers and investments. A prenup helps clearly document these financial positions and reduce uncertainty in the event of divorce. - Prenups is unromantic and demonstrate a distrust towards your partner:
Planning for a marriage’s end before it even began may seem unromantic to couples, especially considering many couples may still be in the honeymoon phase. However, this is more the reason why couples should have open conversations about finances because marriage is not only a grand gesture of love but carries considerable financial implications. - Prenups put pressure on the economically weaker party:
Between two parties, there may be a significant disparity in financial wealth. In such cases, the economically weaker party may feel pressured to accept terms that limit their rights simply to finalize the prenuptial agreement. However, with proper legal advice, the economically weaker party can make an informed decision based on a clear understanding of their options.
Three reasons why couples should consider getting a prenup:
- Certainty and transparency
By disclosing your assets and income in a prenuptial agreement, both partners gain a clear understanding of each other's financial situation. This transparency allows both parties to agree in advance on how assets should be divided in the event of a separation or divorce, providing certainty and helping to avoid the time, cost, and emotional stress of financial litigation during separation or divorce.
- Cost effective
Although parties will incur legal fees for advising , negotiating and drafting the terms of the prenup, this cost is usually considerably cheaper compared to litigating the division of assets should the couple later separate or divorce.
- Protection
Prenups allow parties to 'ring-fence' assets such as inherited wealth, business interests, or property acquired before marriage. They can also shield one party’s assets from being used to pay the other’s debts. Furthermore, a prenup can act as a safety net for a party who may reduce or give up a potentially lucrative career to care for the family. It can include provisions that recognise this sacrifice and set out how that party should be provided for if the relationship ends, which the court is likely to take into account when deciding what is fair.
Conclusion:
Prenups are increasingly recognised as a practical and responsible step for couples planning to marry. A well-drafted prenup reflects open communication and a shared commitment to protecting each other’s interests. It provides clarity and can significantly ease the financial and emotional strain in the event of separation or divorce.
At Chan Neill Solicitors LLP, we believe that a well-drafted prenuptial agreement is a practical step for modern couples. With the right legal advice, a prenup can be tailored to fairly reflect each party’s individual circumstances—offering peace of mind and a stronger foundation for the future.
For couples entering marriage with existing assets, business interests, or simply a desire for financial transparency, a prenuptial agreement is well worth considering.