Divorce with a business involved UK

When a divorce arises, there are various aspects that need to be dealt with, this can also include any business that the spouse may own or share. So what happens on divorce with a business involved UK? In this article, we will explain what can happen when a divorce involves a business in the UK.

What is a business in marriage?

Businesses take many forms, including Sole Trader, a Partnership or a Limited Company. Irrespective of the type of business and/or whether it is held by one party or both parties, a business will be treated as a marital asset.

A marital asset refers to property or assets that are acquired during the course of a marriage or are considered part of the marital estate. These assets are subject to division between spouses in the event of a divorce or separation. Marital assets can include a wide range of items, such as property, vehicles, bank accounts, investments, furniture and other possessions acquired by either or both spouses during the marriage.

What happens on divorce with a business involved UK?

When a divorce with a business involved UK, financial disclosure will take place in order to consider the terms of an appropriate financial settlement.  Part of the disclosure will include the provision of the company accounts for a business, for at least two financial years, along with Tax Returns and an indication as to the likely value of the business.  Initially, this may be from the Accountant associated with the business.  

In many circumstances, a formal valuation of the business may need to be undertaken by an Independent Accountant. This would be done on the joint instruction of the parties, through solicitors and at joint expense.  The valuation of a business can range from £2,000 to several thousand pounds.   

In recognition of the fact that a business is not the same sort of asset, for example, as the marital home, a discount may be applied, when valuing the business for matrimonial purposes. This may also depend on the interest of the owning spouse, such as whether they are the only Shareholder or a minority Shareholder. Once the business has been valued, this will assist in arriving at a settlement and a consideration of how the business will be dealt with. It may be possible for a lump sum to be paid, which could be done by instalments. Occasionally, one spouse may be awarded shares in the company and, in very rare circumstances, the company may need to be sold.

How can Taylor Bracewell’s Family Lawyers help?

Wherever a business forms part of the marital assets, expert advice should be taken from a matrimonial solicitor.  It is important to obtain the correct information in respect of the business and consideration to be given to a formal valuation and thereafter, how your interest in the business may be dealt with. Our family team can help you with this. If you wish to speak to a member of our team, please contact the team by calling 01302 341 414 for our Doncaster lawyers or our Sheffield lawyers on 0114 272 1884. Alternatively, you can fill out our online enquiry form.