Readers’ forum: Can shareholder’s wife be assigned dividend-only shares?

I act for a successful partnership of two brothers. They are now looking to incorporate the business. One of the partners is married and the other is single.

The married partner wants to bring in his wife as a shareholder. She would get 20% of the shares with her spouse holding 30%. Thus the current 50-50 split between the two sides of the family would be maintained.

The single brother has approached me saying that he is unhappy with this. He has no objection to dividends being paid to his sister-in-law but he thinks that his brother’s marriage is not strong and fears that there might be a divorce and doesn’t want to risk the company’s shares being mixed up in divorce proceedings. He has asked whether his sister-in-law’s shares could be dividend-only shares with no other rights.

The problem with this would be that there is then a...