Divorce and Business Assets: How does it work?

Request a call from a family law solicitor


Going through a divorce of marriage or dissolution of civil partnership can be an extremely challenging and emotional time, however, it can become even more complicated if there are business assets involved within the marriage. Our team of divorce solicitors here at Expert Family Law are highly experienced and knowledgeable surrounding divorce proceedings that include the divide of business assets and strive to ensure amicable outcomes for all our clients.

If you have any queries surrounding divorce and business assets then please do not hesitate to get in touch with our team today to find out how we can assist you.

Are businesses shared assets in a divorce?

There are several different types of business ownership, including limited companies, sole traders and partnerships, and going through a divorce as a business owner does not automatically mean your business is to be sold as many are quick to assume.

Generally speaking, business interests are included in divorce proceedings and taken into account when it comes to the divorce settlement. This is the case regardless of if a spouse has never had any input in the running of the business, it is still relevant to the separation of assets as it is capable of being shared like many other significant assets such as properties and savings.

In the UK, it is at the court’s discretion as to how to divide the assets. In some cases, a court may award one spouse the entire business while granting the other spouse a greater share of other marital assets depending on the circumstances of the case, not to mention the personal wishes of the spouses involved.

Does the court have the power to sell the business?

Yes, the court can order the business to be sold, however, this is quite rare and depends on a number of different factors. Typically, a court will order a business to be sold if the assets of the business in a divorce can not be shared fairly. If the court decides that selling the business is the best course of action then arrangements can be made to allow the business to be valued and sold at a fair value whilst structured financial payments are made to the other spouse.

How is a business valued during a divorce?

Valuing a business during a divorce can be a complex process that requires the expertise of a professional appraiser who can provide the relevant financial advice needed for splitting a business in a divorce. There are several approaches that can be used to determine the value of a business, including:

  • Asset approach: This approach involves valuing the assets of the business, such as property, equipment, and inventory, and subtracting any liabilities. This method may be most appropriate for businesses that have a significant amount of tangible assets.
  • Income approach: This approach looks at the income generated by the business and projects future earnings based on past performance. This method may be most appropriate for businesses that have a steady stream of income.
  • Market approach: This approach involves comparing the business to similar businesses in the same industry and using market data to determine a fair value. This method may be most appropriate for businesses that are similar to others in the industry and have a significant market presence.

In addition to these approaches, there may be other factors to consider when valuing a business, such as goodwill, intellectual property, and customer relationships. An experienced business appraiser can help determine which approach is most appropriate and provide a fair and accurate valuation of the business.

The value of the business is very important if it is part of the matrimonial assets, however, the value of the business does not automatically mean each spouse will get a financial stake in the business during a divorce. In some instances, the value of the business will be used to offset other assets to the amount a spouse would be due from the business value.

What about family businesses?

Having a family business can present its own challenges when a divorce arises. Some couples may agree to to carry on running the business as business partners once they are divorced, however some couples cannot see eye to eye which means the business is likely to suffer if the two ex-spouses aren’t getting along.

In cases like this, where the spouses cannot see eye to eye, the court would prefer a ‘clean break’, in which one spouse would regain control of the business and the other would receive financial compensation with others assets. This might also mean that one spouse transfers their shares to the other.

How can Expert Family Law assist?

If you are getting divorced and are concerned about divorce and business assets, our panel of family law experts are on hand to answer any questions you may have. Our experience means we have a strong track record of getting fair and agreeable financial settlements for our clients during divorce proceedings.

We understand that divorce comes with many emotional challenges, and our experts aim to take some pressure off our clients at what is already an extremely difficult time. We can assure you that your case will be dealt with in a compassionate and understanding manner.

The solicitors on our panel can also assist you through the whole process of divorce, including the application, assisting with child arrangements, financial settlements and ancillary relief following the termination of your marriage.

If you have any questions regarding divorce and business assets then get in touch today using the form at the top of the page to find out if a divorce solicitor from our panel could help on your case.



Divorce Proceedings

Ancillary Relief

Domestic Abuse

Child arrangements

Expert Family Law

Keep up to date with the latest family law news