Help! I’m divorcing but want to protect my business

20 Aug 2019 | Lisa Pepper
gold padlock

The number of self-employed workers in the UK is on the rise, with almost five million of us choosing to become our own boss. This increase is also fuelling a rise in entrepreneurs seeking to ‘divorce-proof’ their business.

With over 100,000 divorces annually, Lisa Pepper, a family lawyer at London law firm, Osbornes Law says it is becoming increasingly common for entrepreneurs, both male and female, to take action even before they start the divorce process.

“It is usually entrepreneurs whose spouse has had no role in the business who want to protect what they have worked for. Their worst-case scenario is for their spouse to have to be paid out for part of a business in which they have had no part in building.

“Yet the law will take a dim view of anyone seeking to squirrel away assets or make significant changes to their circumstances in view of an impending divorce.”

Matrimonial assets are financial assets acquired during your marriage, such as the family home. Financial assets acquired either before your marriage or after you have separated are more likely to be classed as non-matrimonial assets. These might include an inheritance or shares purchased before you got married.

However, Lisa says that it is rarely clear cut because many spouses argue about their contribution to the business.

In one recent case, Lisa says a divorcing husband who owned a successful media business had to pay his wife a portion of the value of the business. “As a tax-efficient way to draw income from the business, his wife was named as a fellow director. On divorce, she asserted that she was very involved in the business from the outset, from inputting ideas to organising the Christmas party.”

Lisa offers the following tips for entrepreneurs:

  • It might not be the most romantic gesture in the world, but all entrepreneurs really should consider a pre-nuptial or post-nuptial agreement: Even though they’re not legally binding in England and Wales, the courts are becoming more open to their use and will try uphold an agreement so long as: both parties had independent legal advice on the agreement, financial disclosure was undertaken when negotiating the agreement, and in the case of pre-nuptial agreements, it is signed no later than one month before the wedding.
  • Keep your household and business finances separate: Keeping these separate will avoid any doubt around what is a matrimonial and a non-matrimonial asset.
  • Restrict the involvement of your spouse in the company: Don’t sit around the kitchen table discussing your business in detail or use your spouse to help entertain staff or clients. Doing so will enable your spouse to show they had a role in the business. Lots of business owners also put their spouse as a director or employee for tax purposes, even if they have no real role in the company. This paves the way for them to argue a greater role in the business than they had. Don’t nominate your spouse as director, give them shares in the business or make them company secretary.
  • Find a lawyer who will look for a resolution not a fight: Divorce is devastating, but there are great lawyers out there who can negotiate the best deal without confrontation. Look for a lawyer who is a member of Resolution. All their members have undertaken training and believe in a constructive, non-confrontational approach to divorce and family matters.

Share this article


Insights from our London Divorce LawyersVIEW ALL

  1. 8.12.2022

    The courts approach to costs in financial proceedings...

    WC V HC – a recent costs case in financial proceedings on divorce The recent case of WC v HC [2022] EWFC 40...

    Read more
  2. 6.10.2022

    How to set aside an order in financial...

    My ex-spouse didn’t tell the truth about their finances when we divorced, can anything be done? Can the financial...

    Read more
  3. 6.5.2022

    My ex has cut me off during divorce

    Unfortunately, it is far too common that when a client says it’s over, their spouse with the “purse strings”...

    Read more
  4. 6.5.2022

    How the Court views loans from parents during...

    A frequent issue in financial divorce cases is a loan from a spouse’s parent, often to pay legal fees,...

    Read more
  5. mesher order house

    Mesher Orders Explained

    What is a Mesher order? A Mesher Order allows the sale of the family home to be postponed in a...

    Read more
  6. 11.4.2022

    Divorcing couples reaching financial settlement through Private FDR

    The Runaway Advantages of the Private FDR Our specialist lawyers are keen to ensure our divorcing clients achieve cost-effective outcomes...

    Read more
  7. 9.12.2021

    Negotiating financial settlements in divorce

    Costly and acrimonious divorces: a lesson in what not to do  If you’re determined to pursue your financial claims...

    Read more
  8. squirrel hiding assets

    Uncovering hidden assets in your divorce

    Hiding Assets During a Divorce As part of your divorce, you and your ex will have to agree on how...

    Read more
  9. 9.11.2021

    I helped build my spouse’s career

    What is the impact on our divorce settlement? It’s been almost two years since The Da Vinci Code author...

    Read more
  10. 9.11.2021

    6 cases that shape your divorce settlement

    Part of what makes our divorce lawyers experts in their field is knowing what way a judge is likely to...

    Read more
  11. 27.4.2021

    Divorce in your 60s – The Financial Implications

    How common is a divorce in your 60s? The latest divorce figures from the Office of National Statistics (ONS) show...

    Read more
  12. 18.2.2021

    Tax implications for divorcing couples

    As the end of the Stamp Duty holiday looms on 31 March 2021, that is not the only deadline that separating and...

    Read more
  13. london houses

    When can you claim PPR Relief on more...

    Family lawyers are familiar with ‘Mesher Orders‘ where the court orders that as part of the financial settlement on divorce,...

    Read more
  14. father with child

    Setting aside a financial remedy order

    What has been the impact of the coronavirus pandemic on financial remedy orders? Can you do it at all? Barder...

    Read more
  15. family in poppy field

    Divorcees could appeal financial settlements if they lose...

    Billions of pounds have been wiped off shares as uncertainty builds amid the coronavirus crisis, but what does this mean...

    Read more
  16. man and women at a table

    Financial Cases on Divorce – The Resurrection of Calderbank...

    When a couple divorce, they are encouraged by the Courts to consider other dispute resolution options such as mediation: before...

    Read more
  17. gold padlock

    Help! I’m divorcing but want to protect...

    The number of self-employed workers in the UK is on the rise, with almost five million of us choosing to...

    Read more
  18. divorced man with empty wallet

    How the Insolvency Act works in divorce

    The case of Hayes v Hayes (2012) EWHC (Ch) (Chancery Division (23.03.12) (unreported presently) is one of the first cases to give...

    Read more
  19. piggy bank

    Managing Finances When Divorcing

    Divorce Day Believe it or not, January is considered divorce season among solicitors and lawyers. There is even a phenomenon...

    Read more
  20. 25.3.2019

    Self-Help in Financial Remedy Proceedings

    One of the first things we explain to clients who are getting divorced is that, when it comes to financial...

    Read more