[Direct answer]It is possible, and it is recommended to reach an agreement in writing. According to Article 1065 of the Civil Code of the People's Republic of China, the couple may agree that the property acquired during the marriage and the premarital property shall be owned by each party separately, jointly owned by both parties, or partially owned by each party and partially jointly owned. Such an agreement shall be in writing and shall be legally binding on both parties. Premarital equity is personal property, but Article 26 of the Interpretation (I) of the Marriage and Family Code stipulates that the income generated from personal property after marriage, except for the fruits of the investment and natural appreciation, shall be deemed as common property. Therefore, it is best to specify in the agreement whether the appreciation and dividends of premarital equity will be shared. The agreement shall not violate mandatory provisions of law, nor harm the interests of third parties. Where the company's equity is involved, it shall also take into account the company's articles of association and the shareholders' preemptive rights.
1. Problem background and typical scenarios
Entrepreneurs or investors often hold company equity, partnership shares, or stock options before marriage. After marriage, the equity value may increase significantly, and the other party may claim a share of the increased value during a divorce. In the judicial practice of Beijing, the court distinguishes between the equity itself and the post-marital income: if the equity clearly originates from the individual before marriage, the equity itself generally belongs to the individual; but the increase in value and new dividends generated from participating in the management of the company after marriage may be recognized as joint property. If there is no agreement in the pre-marital agreement, the cost of providing evidence and resolving disputes afterwards is often high.
II. Key points of contention
The disagreements focus on four points: First, whether the pre-marital equity itself belongs to personal property, and how to prove the time of investment and acquisition; Second, whether the increase in value of equity after marriage is a natural increase or operating income, and what the judgment criteria are; Third, how to define the nature of dividends, equity transfer payments, and option exercise income; Fourth, whether the pre-marital property agreement is valid and can be used to oppose third parties. Courts usually respect the parties' legitimate written agreements, and when there is no agreement, they handle the matter according to the nature of the income, with the party claiming personal property bearing the burden of proof.
III. Professional analysis by Henglue Law Firm
When handling pre-marital property agreements, Henglue Lawyers typically focus on four key points. First, clarify the scope of the subject matter: List the company where the equity is held, the holding ratio, the acquisition time, and the source of the investment to avoid vague descriptions. Second, distinguish the levels of rights: Separately stipulate the ownership of the equity itself, the post-marital appreciation, dividends, and transfer income to reduce the scope for interpretation. Third, take into account the rules of company law: Equity transfers are subject to the company's articles of association and shareholders' preemptive rights, so the agreement should stipulate that the spouse cannot directly claim shareholder status, but can only claim compensation for the value of the property. Fourth, improve the signing process: Both parties should sign the agreement in person and indicate the date. If necessary, a notarization or lawyer's witnessing should be carried out, and the investment certificates and the original agreement should be preserved. It should be noted that the agreement only binds the couple and cannot be used against bona fide third parties. For overseas equity or trust structures, legal applicability and cross-border enforcement issues also need to be considered. Regarding the post-marital appreciation of pre-marital equity, if there is no agreement, the court will typically assess whether the spouse participated in the operation or invested management labor to determine whether it is a natural appreciation. For those who simply hold shares without actively managing the business, there is a higher likelihood that the appreciation will be deemed natural.
IV. Practical suggestions and legal basis
Action suggestions: First, sign a written property agreement as early as possible before or during the marriage to clarify the ownership of equity and income; Second, keep the investment certificates, company charters, shareholder registers, and industrial and commercial registration materials; Third, agree on the methods of equity transfer, dividend distribution, and the realization of spousal rights, avoiding directly involving shareholder qualifications; Fourth, if there are valuation disputes, you can entrust an evaluation agency to determine the benchmark value. For pre-marital property agreements and family disputes, you can refer to the relevant laws and regulations.Divorce litigation and family disputes; For issues related to equity and corporate governance, you can refer to the following materials for reference.Business and contract disputes in enterprisesLegal basis: Articles 1062, 1063, and 1065 of the Civil Code of the People's Republic of China (all of which came into effect on January 1, 2021), and Articles 25 and 26 of the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Chapter of the Civil Code of the People's Republic of China (which came into effect on January 1, 2021). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.
5. Henglue Law Firm's Reminder
Firstly, the agreement must be in writing and signed by both parties with the date specified. Oral agreements are difficult to prove. Secondly, the equity itself and the post-marital appreciation and dividends should be stipulated separately. The more specific the terms are, the less disputes there will be. Thirdly, the agreement cannot oppose bona fide third parties, nor can it deprive the spouse of basic property rights to the extent that it is grossly unfair. Fourthly, for cases involving multiple shareholders, options, or overseas structures, it is recommended to review the company's articles of association and relevant laws simultaneously. For cases involving equity and commercial arrangements, a comprehensive review can be conducted.Business and contract disputes in enterprisesFor reference, you can check the section related to cross-border equity and financial assetsFinancial capital and cross-border transactions involving foreign entitiesColumn.
VI. Frequently Asked Questions
Q1: Do pre-marital equity interests need to be included in the property agreement?
It is recommended to specify this in the agreement. Pre-marital equity is considered personal property, but post-marital appreciation and dividends may be deemed as joint property if there is no agreement. A written agreement can specify the ownership of equity, appreciation, dividends, and transfer income in a layered manner, reducing the burden of proof and the cost of disputes during divorce. The agreement should be in writing and signed by both parties.
Q2: If the pre-marital equity increases in value after marriage, should it be divided in a divorce?
It depends on the reason for the appreciation in value. Appreciation in value caused by market conditions generally remains the individual's property; appreciation in value resulting from participation in management and operation after marriage may be recognized as joint property. If there is a clear stipulation in the pre-marital agreement, the matter shall be handled in accordance with the agreement. In the absence of an agreement, the court will make a comprehensive judgment based on whether the individual has invested in the operation and whether common resources have been utilized.
Q3: If the agreement stipulates that the equity belongs to me personally, can my spouse still claim it?
The agreement is effective between spouses, and the spouse generally cannot claim a division of the equity itself; however, if the agreement clearly excludes the spouse's basic property rights, damages the interests of creditors, or violates mandatory legal provisions, it may be deemed invalid or partially invalid. It is recommended that the provisions be designed to balance fairness and enforceability, and to avoid excessive bias.
Q4: Do equity agreements need to be notarized?
The law does not require notarization, and the agreement is binding once both parties sign it. However, notarization or witnessing by a lawyer can help fix the signing time and the true intention of the agreement, reducing the possibility of being challenged in the future. For agreements involving large amounts of property or complex structures, it is recommended to draft and witness the agreement under the guidance of a professional lawyer.
Q5: Can the agreement stipulate that the spouse directly becomes a shareholder?
It is generally not advisable to make such an agreement. The transfer of equity is subject to the company's articles of association and the shareholders' preemptive rights. Whether the spouse can obtain shareholder status depends on the company and other shareholders. A more prudent approach is to agree that the spouse only claims compensation for the property value of the equity, rather than directly obtaining shareholder status, in order to reduce the dual disputes between the company and the family.
This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify regional differences.
If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Divorce litigation legal services·Beijing Henglu Law Firm
Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.