Dividing Business Assets On Divorce
If you are a business owner facing divorce, you are likely aware of the potential legal complexities and risks involved.
Dividing business assets in divorce is a delicate and intricate process that requires specialised knowledge and experience.
At Bennett Griffin, our team of dedicated divorce solicitors is here to guide you through this challenging journey, ensuring that your business assets are protected and that you receive the best legal representation possible.
Contact our Family Law team today to see how we can help.
Dividing Business Assets
When a marriage comes to an end, and you are a business owner, the division of assets can become significantly more complex.
Your business is not just a source of income; it represents your hard work, dedication, and, often, your lifelong dream.
Protecting your business assets during a divorce is essential to secure your financial future and the future of your enterprise.
So, how does the court typically go about dividing business assets?
Identifying and Valuing Business Assets
The first step in dividing business assets during a divorce is to identify and assess the value of these assets.
This process involves a thorough financial disclosure, where both spouses must provide complete and accurate information about their financial holdings.
Non-disclosure of assets can be a significant concern during divorce proceedings.
Failing to disclose business assets or other financial information can lead to legal consequences and costs penalties.
Contributions and Section 25 Factors
The court considers various factors when making financial orders, including each spouse’s financial and non-financial contributions to the marriage and the business.
These contributions can include financial support, childcare, and contributions to the growth of the business.
Under Section 25 of the Matrimonial Causes Act, the court examines factors like the financial needs of both parties, the welfare of any children, the duration of the marriage, the standard of living, and any disabilities or health issues.
The court’s primary objective is to achieve a fair and equitable division of assets.
This doesn’t necessarily mean a strict 50/50 split of business assets; fairness is determined based on the unique circumstances of each case.
Parties are encouraged to reach a mutually agreeable settlement through negotiation, mediation, or collaborative divorce. This can be a more cost-effective and less adversarial approach.
If an agreement cannot be reached, the court may impose a financial order specifying how the business assets should be divided.
Protecting the Business
If one spouse owns and operates the business, the court may explore options to protect the business’s continuity.
This can involve granting one spouse ownership while requiring financial compensation to the other.
Remember that every divorce case is unique, and the outcome depends on the specific facts and circumstances involved.
Why Choose Bennett Griffin?
At Bennett Griffin, our dedicated team of experienced divorce solicitors specialise in handling cases involving businesses.
Their in-depth knowledge of family law and business matters enables them to provide tailored solutions that protect a business owner’s financial interests.
They work closely with clients to understand their needs and concerns, crafting personalised strategies to achieve the best possible outcomes.
Bennett Griffin has a highly expert team of company and commercial lawyers, who can provide related and relevant advice to family clients.
This commitment to individualised service ensures business owners receive comprehensive support throughout the divorce process.
Contact our team today.
Watch Our Vlogcasts
Our Family team discuss Family Law related matters on their regular podcast ‘Legal Mythbusting – Family Matters‘.
The full playlist can be watched below or viewed directly on YouTube.
Divorce and Business Assets FAQs
Is my spouse entitled to half my business if we divorce?
The division of assets in a divorce is determined on a case-by-case basis. Your spouse may have a claim to a portion of the business’s value, but this doesn’t necessarily mean a 50% split. Our solicitors will work to achieve a fair and equitable outcome.
Can I ring-fence my business in a prenuptial agreement?
Yes, it’s possible to protect your business assets through a prenuptial agreement. Our solicitors can assist you in drafting a legally sound prenuptial agreement to safeguard your business interests.
What if my spouse has no financial interest or involvement in my business?
If your spouse has no financial interest or involvement in your business, it can impact the division of assets in your divorce. In the UK, non-matrimonial assets, such as businesses owned before marriage, may be treated differently. The court’s goal is fairness, considering factors like financial needs and contributions to the marriage. While your spouse may not have a direct claim to the business, seeking legal advice is vital to ensure a fair and equitable settlement that reflects your specific circumstances.
My business partner is getting a divorce – how do we protect the company?
When your business partner is going through a divorce, taking proactive steps to protect the company is essential. Start by reviewing any existing shareholder or partnership agreements that may contain provisions for such situations. Maintain open communication with your partner to understand their intentions and explore options for an amicable resolution. Consider obtaining a professional business valuation to facilitate fair negotiations. Ensure that any buy-sell agreements are adequately funded and ready for implementation if necessary. Consulting with a business and family law attorney can provide valuable guidance. Throughout this process, prioritise the continuity of your business operations while respecting your partner’s privacy and confidentiality.
Can I sell my business during a divorce?
Yes, you can sell your business during a divorce, but it’s a complex process. You’ll need to consider factors like your spouse’s consent, business valuation, timing, and legal assistance. Negotiating terms and consulting with a family law solicitor experienced in business-related divorces is crucial for a smooth process.
Your Bennett Griffin Team