Business & Divorce

Business and Divorce

How a divorce may impact your business

Whether you are a sole trader or managing a limited company, it's crucial to understand how a divorce could affect your business.

Our family law team provide no-nonsense straightforward legal advice and they have the expertise to deal with the division of assets during a relationship breakdown.

To arrange a suitable appointment just call 01535 622644.

If you own a business then it will form part of the assets. These assets will be divided as part of any divorce settlement.

The family court, not the commercial court, decide how business assets will be shared.

Any valuable business or business interests will be included in any financial disclosures relating to the divorce.

Business valuations are complicated and subject to personal and expert opinions. If an unrealistic valuation (whether under or over) is placed upon the business it can lead to prolonged and expensive litigation.

Think carefully about what you want for the business now and in the future. As a business owner you need to consider what you need to do to protect the business and how it will continue if a settlement is awarded in the courts.

If you are not a business owner but feel you have a claim against one then you need to consider how you can seek fair compensation without jeopardising the firm's operations.

Take the time to find an experienced divorce solicitor or lawyer with experience and a track record of success and ensure that any finaincial settlement aligns with your personal and business objectives.

The family courts tend to leave the business with the owner and compensate the spouse with a larger share of the other assets and/or maintenance.

As with any resolution, determining whether this is the fairest approach can be difficlut. There are no guarantees that the business will continue to do well or provide the same level of income in the future. The reverse is also possible of course.

The Court could decide to share the income, divide the shares and/or split the assets e.g. cash to one party and the non-liquid assets e.g. stock, buildings, to the other.

Refrain from making rash decisions about the business that will be perceived by the court to be obtructive such as taking out additional borrowings to reduce its value.

Consider any sensible steps that can be taken to protect the business and reduce the risk of financial damage.

It is essential to take independent legal advice from a specialist solicitor or lawyer as soon as possible:
- Seek out someone with expertise in dealing with high-value divorces and divorces involving businesses.
- Ask locally for recommendations.
- Consider some of the questions provided here as a starting point, as you will be asked about these in any initial fact finding exercise.

How would you like to talk to us?