How to Get A Divorce When You Own A Business Together

The divorce process can be tricky in regular circumstances, but it can become even more protracted when a business is involved. If you and your spouse own a business together, you might be worried about how the court might split the assets. Investing in a high-quality and reputable lawyer is the best way to ensure a fair and favourable outcome.

In this article, we explain what to expect when two business owners divorce each other.

Can an agreement be found outside of court?

We’ll always suggest that you and your spouse try to reach an outcome that works for both of you before taking it to court. Not only does it skip a drawn out court process, but it avoids putting the decision into the hands of a judge where the outcome may be unpredictable. Reaching a settlement is the ideal solution because it leaves both parties content with their end of the bargain. 

However, we recognise that with high emotions, animosity and lack of communication, reaching an agreement will not always be possible. In this case, the decision will be left to the court.

How will the business be valued?

One of the first judgements the court must make is how much the business is valued at. The process of valuing a business may not be so straightforward, especially if it is privately owned. Either spouse can arrange a valuation of the business, but it’s usual for a single joint expert to be appointed. Here the appraiser will investigate the following:

• The assets of the business, including property, stock and equipment
• The earnings of the business, including past, present and expected future profit
• The structure of the business, including whether it’s a limited company, sole trader or partnership.
• The liquidity of the business and tax implications

Once a valuation has been determined, the court will have a financial figure that they can split and award as part of the financial settlement.

Splitting the assets

When it comes to splitting the assets, the first point of action from the court will be to determine whether it is fair to split the assets equally. This is generally the preferred judgement but is not always the fairest. The judge may grant a large share to one party over the other if:

• They had a more active role in the business
• They established the business
• They spent more time building up the business
• They own larger shares in the business
• If one party has greater needs than the other

However, each divorce has its own nuances and the above factors might not necessarily grant one party a larger share. Judges operate with a lot of discretion and their decisions can often be unpredictable. 

For the best chance of reaching a satisfactory outcome, employ the assistance of an expert family lawyer. Goodwins Family Law Solicitors is composed of a team of lawyers who specialise in high-net worth divorce. We will take on your case and look at your unique circumstances to determine the best course of action for you. Working with diligence, professionalism and care, we will steer you towards a favourable outcome and help you move into the next chapter of your life. Established over 25 years, Goodwins has an excellent track record and client satisfaction rate.

Contact our team to find out how we can help you.