Divorce can be a challenging process, and for business owners in England and Wales, it introduces
additional complexities. Divorce and finance solicitor Rachel Buckley explains some of the things
business owners need to consider.
Has your business been classified as a marital asset?
Business assets in England and Wales are generally considered marital assets, regardless of whether
they are held by a single spouse. The court evaluates a variety of factors, including the duration of the marriage and the contributions of each spouse, when evaluating the division of assets.
Valuing the Business
The business must be valued accurately. This process entails the evaluation of market conditions, profits, liabilities, and assets. Forensic accountants, alongside other independent specialists, are frequently employed to render an impartial assessment. If spouses hold divergent opinions regarding the business’s value, disputes may arise, necessitating professional valuation to ensure a fair settlement.
Division of business assets
A fair distribution of assets is the court’s objective, taking into account factors such as financial needs, contributions, and prospective earning capacities. Options for the division of business assets include:
- Offsetting means that one spouse retains the business, while the other receives assets of comparable
value. - Transfer of Shares: the transfer of a portion of the business shares to the non-owning spouse.
- Ongoing Payments: The arrangement of maintenance payments that are derived from business
income.
The method that is selected is dependent upon the couple’s distinctive circumstances and the structure of the business.
For the protection of your business
Here are a few legal tools that can be employed to protect your business interests:
- Post-Nuptial and Pre-Nuptial Agreements: These agreements can dictate the disposition of
business assets in the event of a divorce. - Shareholder agreements: The business’s integrity can be safeguarded by incorporating clauses
that anticipate divorce scenarios. - Financial Separation: Asset delineation can be facilitated by maintaining a clear distinction
between personal and business finances.
Despite the fact that these measures provide some protection, courts may still evaluate all assets to ensure a fair settlement.
Seeking professional business divorce advice.
Careful planning and expert guidance are necessary for business owners to navigate divorce. Especially
when a business is involved, divorce can be overwhelming. It is imperative to consult with a family
solicitor who is a specialist in business valuations and settlements and can provide insightful legal
guidance. Your financial future can be secured and business disruptions can be minimised with the
appropriate guidance.
View my Q&A video here for additional ideas and insights that are specifically designed for business owners in England and Wales who are currently navigating divorce.
Need some advice? Get in touch today
"*" indicates required fields
The information submitted here is used and stored for the purpose of replying to the enquiry. For more information on how we process data please visit our Privacy Policy.
