Divorce and business assets

If you are involved in running your own business, whether as a sole trader, in partnership, or as a company director, then it is important that you know how a divorce could affect your business.

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  • “Osbornes is firmly established as one of the top tier family departments in London. It has a range of clients and cases, many of which are notable because of their complexity. The team increasingly attracts clients who are very wealthy, or in the public eye.”

  • “They are not only effective, knowledgeable and professional, but also pleasant to deal with as people.

We understand that this can be a worrying time for you, not only facing changes in your personal life but with the added stress of how that may impact your working life.  Below we take a look at some of the most frequently asked questions from our business clients contemplating divorce.

One of the most contentious issues when it comes to businesses in divorce settlements tends to be the value of any business.  It is not uncommon for the spouse running the business to portray it as being of little or no value.  Accounts need to be scrutinised to ensure a fair value is obtained, and how the value is assessed will depend on the business structure and profits.  

Any business that you or your spouse have a financial interest in will need to be disclosed and taken into account in your divorce settlement.  There are a number 

of factors that will determine how big a factor a business asset will feature in a financial settlement. These include the nature of the business, how long it has been established and what involvement your spouse has in the business.

Family and international business structures can sometimes make it difficult to value the business and to release cash or assets from it, however our lawyers work closely with accountants who have expertise in valuing businesses and understanding the interplay between business and tax structures in divorce.  

Most importantly, we understand the importance of keeping your business as a going concern and can guide you in reaching an outcome that will ensure the integrity of your business is not compromised. 

Divorce & Business Assets FAQs

Will my business be taken into account in divorce?

It is often thought that a business will not be taken into account in a divorce, but that is not the case.

The starting point is that a business is considered to be an asset. If you have an interest in a business, then it must be disclosed during the divorce process in the same way as any of your other assets. Your share of any value in the business will be taken into account when calculating the overall matrimonial pot to be divided between spouses.

Does it matter if I am a sole trader, a partner in a small business or a company director?

Your business structure will dictate how assets are owned:

  • as a sole trader, the business assets are solely yours;
  • as a member of a partnership, the business assets are owned jointly by the partners, either equally or in accordance with shares specified in a partnership agreement; or
  • a company is a separate legal entity, which means that any business assets are owned by the company, not by individual directors.

How a company is operated and your individual shareholding will also influence how easy it is to realise your share in its value.

How is a business valued in a divorce?

Once the business structure has been examined, this will clarify who legally owns business assets and liabilities, and what interest shareholders have if it is a company. It will then be necessary to look at the value of the business in terms of tangible and intangible assets.

The business valuation will usually be based on one or a combination of the following:

  • Business assets – this is typically used in investment businesses where the value is nearly wholly held in the assets of the business itself. Commonly this will be where the business is involved in buying property and letting or renovating it. It could also be used in a farm or manufacturing business where the assets are considerable.
  • Trading pattern – this involves looking at the history of trading profits and estimating the future growth of the business.
  • Business Income – this looks at what income a spouse generates from a business. As well as drawings, it looks at other expenses covered by the business to build up a picture of what the business is worth. This is commonly used in a skill-based business, such as web design, where tangible assets may be few, but the income generated is considerable.

It is normal to instruct an expert, usually an accountant, to value the business. We have a panel of experts and depending on your company structure and needs we will advise you on the most appropriate expert.

How do I protect my business in a divorce?

If possible, we will always look to find a solution that means you can preserve your business. Indeed, courts have shown a willingness to leave business structures unaffected by divorce and enable them to continue as a going concern.

While this means that you are unlikely to have to sell or transfer your business, it may still mean that you have to find money or other assets to provide for your spouse in lieu of their interest in your business. Obtaining early legal advice will give you the best options to protect your business.

My business was established long before I married, will this change how much my spouse is entitled to?

If your business was established before you married, or perhaps even before you met your spouse, then that will be relevant. The court’s aim is to establish a position of equality between spouses in relation to the division of matrimonial assets. Assets acquired prior to marriage are not usually considered to be matrimonial assets. However, in relation to an ongoing business that was acquired prior to marriage, your spouse will be entitled to an interest as the business has continued during the marriage.

This leads to the next complex question.

Is my spouse entitled to half of my business if we divorce?

Well, that will depend on a number of factors including the duration of the marriage, what other marital assets are available to meet each of your needs and how long the business was established prior to the marriage.

It will most likely be necessary to obtain a valuation of the business and we have experience in dealing with complex valuations of this nature and can ensure that the expert has the correct information to hand to enable you to best protect your business interests.

How does a freezing order stop my spouse from devaluing assets?

If you are concerned that your spouse is trying to devalue assets, then you may require a freezing order. This is a type of injunction made by a court to prevent your spouse from dealing with their assets. In order to make a freezing order, the court must be satisfied that there is a risk your spouse will dispose of or devalue an asset, and that this action would be prejudicial to you in obtaining your fair share in a financial settlement. If you suspect your spouse may do this then it is important that you act quickly as taking preventative action by way of a freezing order is preferable to trying to obtain a remedy following an asset being transferred or depleted.

How Osbornes can help?

When it comes to considering your business during a divorce it is essential that you obtain early expert legal advice. Our expert divorce lawyers in London have experience in representing and advising clients on all aspects of divorce including how best to value and deal with business assets in financial settlements. We deal with both UK and overseas businesses.

If you are overseas or outside London, we have high-speed video conferencing facilities and a full online service to ensure you are kept up to date and fully appraised of your case and legal options.

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    • Andrew secured me the best financial settlement for my claim. He is a credit to Osbornes Solicitors.

      Family Department Client

    • "Lisa Pepper was recommended to me as non-nonsense and able to help me with a difficult and confrontational divorce. She more than lived up to that – she was practical, collected and always available with a clear opinion and suggestions of how to move forwards. She also was open and helpful about costs and how to mitigate them"

      Legal 500 2021

    • "Mark Freedman is a very capable lawyer, renowned for not being a pushover and pushing his clients’ cases as much as he can, but will always talk sensibly about settlement. He is among the best – tenacious, good judgment and tactically aware."

      Legal 500 2021

    • "Mark Freedman is a dynamic and highly experienced family lawyer who fights extremely hard for his clients and is always in their corner, thus ensuring their loyalty and confidence. In a trial you would always want him on your side."

      Legal 500 2021

    • "She has impressed me as someone who fights my corner but also understands the importance of resolving issues without unnecessary escalation. She is calm and reassuring."

    • "Her mediation practice is exceptional; she is also a great solicitor and has a breadth of skill which is really useful."

      Chambers UK 2021

    • "He is really experienced and wise. He has a lovely manner about him and clients feel safe with him."

      Chambers UK

    • "Jo Wescott is top notch and widely recognised as a rising star throughout the profession. She brings a winning combination of great judgement, an immense work ethic, and a relaxed and charming way with opponents and clients alike. Someone you want on your side”

      Legal 500 2021

    • "Osbornes is pre-eminent for family law in North London. Mark Freedman is a real rainmaker. He is an excellent lawyer and has a top-notch practice"

      Legal 500 2020 - Mark Freedman

    • Mark Freedman is intelligent and personable and has a good selection of high-net work cases.

      Legal 500 2020 - Mark Freedman

    • "Exceptional value for money. Highly competent and reasonably priced. Mark Freedman: one of the best in the field."

      Legal 500 2020 - Mark Freedman

    • "Client-focused. Ready to fight the clients’ corner, but also ready where possible to steer client from unnecessary dispute. Mark Freedman – very experienced, with good instinct for the eventual result. Clients love him and he thinks ahead and directs the client to the best result for the client."

      Legal 500 2020 - Mark Freedman

    • Mark Freedman is a serious player. A fearless family law litigator, who protects his clients’ interests passionately.

      Legal 500 2020 - Mark Freedman

    • Breadth of knowledge and willingness to go the extra mile is what makes it stand out. Mark Freedman – devoted to his clients

      Legal 500 2020 - Mark Freedman

    • Mark Freedman frequently takes on high-value financial and children proceedings that involve complex tax, trust and accounting issues. Sources praise the "tenacity and common sense" he brings to challenging disputes.

      Chambers UK

    • "Mark is very experienced, competent, good with clients and takes a sensible approach to cases. He knows exactly what he's doing."

      Chambers & Partners Directory 2020, Mark Freedman

    • "An exceptional outfit. They take on difficult cases, fight hard and win."

      Chambers UK

    • "The team frequently deals with cross-border estates for high–net-worth individuals."

      The Legal 500

    • "Mark Freedman is a real heavyweight litigator who has dealt with some very significant cases."

      The Legal 500

    • "Mark Freedman boxes clever, keeps his powder dry and when it comes to the end game he negotiates a really good deal."

      The Legal 500

    • "Mark Freedman has a specific focus on high-net-worth divorces and finance cases where there are overseas assets and trusts."

      The Legal 500

    • "Lisa Pepper somehow manages to get parties to settle on matters where there isn’t much hope to start out with."

      The Legal 500

    • "Well-regarded family practice assisting clients with substantial matrimonial disputes and sensitive children proceedings."

      Chambers UK

    • "Mark Freedman draws acclaim for his work in high net worth divorce cases, including those involving company structures, family trusts and overseas assets."

      Chambers UK 2019

    • "He never gives up. He fights for you to the end and has boundless energy."

      Chambers UK

    • Mark Freedman advises high-net-worth clients and knows his stuff.

      Legal 500

    • Highly regarded for his experience as a litigation and mediation expertise, Mark Freedman is tenacious and determined. Clients really feel that he is fighting their corner.

      Chambers UK

    • Andrew handled a very complex, 3 year legal battle for me, with a tremendous amount of patience and professionalism. He is very approachable, always kept me up to date, by phone and e-mail, and responded very quickly to my queries with excellent advice, sound strategic thinking and strong letters to put the other side under pressure. With top contacts for barristers, joint experts and mediation.

      Family Department Client

    • [The Family Law department] handles significant matrimonial finance cases and complex nuptial agreements. Respected for its expertise in cross-border children law matters.

      Chambers UK

    • Mark Freedman represents high net worth clients in complex financial disputes. Sources say that "he's a determined negotiator who'll always do the very best for his clients.

      Chambers UK

    • "Mark Freedman receives a lot of instructions from clients based abroad, often relating to complex divorce proceedings. Sources say: “His main strengths are his enthusiastic passion for the job in hand and his total dedication to his clients.”

      Chambers UK

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    • “Mark Freedman represents high net worth clients in complex financial disputes. Sources say that “he’s a determined negotiator who’ll always do the very best for his clients.”

      Chambers UK

    • “Mark Freedman is considered a ‘brilliant lawyer’ and a ‘great tactician’ who ‘will absolutely fight tooth and nail for his clients’. He is noted for his expertise in private children work and high-value divorces.”

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    • "Exceptional value for money. Highly competent and reasonably priced. One of the best in the field."

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    • "Mark Freedman is intelligent and personable and has a good selection of high-net work cases".

      Chambers UK

    • Andrew secured me the best financial settlement for my claim. He is a credit to Osbornes Solicitors.

      Family Department Client

    • "Lisa Pepper was recommended to me as non-nonsense and able to help me with a difficult and confrontational divorce. She more than lived up to that – she was practical, collected and always available with a clear opinion and suggestions of how to move forwards. She also was open and helpful about costs and how to mitigate them"

      Legal 500 2021

    • "Mark Freedman is a very capable lawyer, renowned for not being a pushover and pushing his clients’ cases as much as he can, but will always talk sensibly about settlement. He is among the best – tenacious, good judgment and tactically aware."

      Legal 500 2021

    • "Mark Freedman is a dynamic and highly experienced family lawyer who fights extremely hard for his clients and is always in their corner, thus ensuring their loyalty and confidence. In a trial you would always want him on your side."

      Legal 500 2021

    • "She has impressed me as someone who fights my corner but also understands the importance of resolving issues without unnecessary escalation. She is calm and reassuring."

    • "Her mediation practice is exceptional; she is also a great solicitor and has a breadth of skill which is really useful."

      Chambers UK 2021

    • "He is really experienced and wise. He has a lovely manner about him and clients feel safe with him."

      Chambers UK

    • "Jo Wescott is top notch and widely recognised as a rising star throughout the profession. She brings a winning combination of great judgement, an immense work ethic, and a relaxed and charming way with opponents and clients alike. Someone you want on your side”

      Legal 500 2021

    • "Osbornes is pre-eminent for family law in North London. Mark Freedman is a real rainmaker. He is an excellent lawyer and has a top-notch practice"

      Legal 500 2020 - Mark Freedman

    • Mark Freedman is intelligent and personable and has a good selection of high-net work cases.

      Legal 500 2020 - Mark Freedman

    • "Exceptional value for money. Highly competent and reasonably priced. Mark Freedman: one of the best in the field."

      Legal 500 2020 - Mark Freedman

    • "Client-focused. Ready to fight the clients’ corner, but also ready where possible to steer client from unnecessary dispute. Mark Freedman – very experienced, with good instinct for the eventual result. Clients love him and he thinks ahead and directs the client to the best result for the client."

      Legal 500 2020 - Mark Freedman

    • Mark Freedman is a serious player. A fearless family law litigator, who protects his clients’ interests passionately.

      Legal 500 2020 - Mark Freedman

    • Breadth of knowledge and willingness to go the extra mile is what makes it stand out. Mark Freedman – devoted to his clients

      Legal 500 2020 - Mark Freedman

    • Lisa Pepper is particularly recognised for her role as a mediator in complex cross-border disputes. Her practice also includes handling prenuptial agreements and issues arising from the dissolution of civil partnerships.

      Chambers UK

    • Mark Freedman frequently takes on high-value financial and children proceedings that involve complex tax, trust and accounting issues. Sources praise the "tenacity and common sense" he brings to challenging disputes.

      Chambers UK

    • "Mark is very experienced, competent, good with clients and takes a sensible approach to cases. He knows exactly what he's doing."

      Chambers & Partners Directory 2020, Mark Freedman

    • "An exceptional outfit. They take on difficult cases, fight hard and win."

      Chambers UK

    • "The team frequently deals with cross-border estates for high–net-worth individuals."

      The Legal 500

    • "Mark Freedman is a real heavyweight litigator who has dealt with some very significant cases."

      The Legal 500

    • "Mark Freedman boxes clever, keeps his powder dry and when it comes to the end game he negotiates a really good deal."

      The Legal 500

    • "Mark Freedman has a specific focus on high-net-worth divorces and finance cases where there are overseas assets and trusts."

      The Legal 500

    • "The very personable and client-focused Lisa Pepper."

      The Legal 500

    • "Joanne Wescott is a very approachable and sensible opponent."

      Legal 500 2019

    • "Lisa Pepper somehow manages to get parties to settle on matters where there isn’t much hope to start out with."

      The Legal 500

    • "Lisa can handle the large and complicated cases but takes equal care with the smaller cases. She is a highly skilled mediator who is a consummate professional."

      The Legal 500

    • "Well-regarded family practice assisting clients with substantial matrimonial disputes and sensitive children proceedings."

      Chambers UK

    • "Mark Freedman draws acclaim for his work in high net worth divorce cases, including those involving company structures, family trusts and overseas assets."

      Chambers UK 2019

    • "He never gives up. He fights for you to the end and has boundless energy."

      Chambers UK

    • Mark Freedman advises high-net-worth clients and knows his stuff.

      Legal 500

    • Highly regarded for his experience as a litigation and mediation expertise, Mark Freedman is tenacious and determined. Clients really feel that he is fighting their corner.

      Chambers UK

    • Andrew handled a very complex, 3 year legal battle for me, with a tremendous amount of patience and professionalism. He is very approachable, always kept me up to date, by phone and e-mail, and responded very quickly to my queries with excellent advice, sound strategic thinking and strong letters to put the other side under pressure. With top contacts for barristers, joint experts and mediation.

      Family Department Client

    • [The Family Law department] handles significant matrimonial finance cases and complex nuptial agreements. Respected for its expertise in cross-border children law matters.

      Chambers UK

    • Mark Freedman represents high net worth clients in complex financial disputes. Sources say that "he's a determined negotiator who'll always do the very best for his clients.

      Chambers UK

    • "Mark Freedman receives a lot of instructions from clients based abroad, often relating to complex divorce proceedings. Sources say: “His main strengths are his enthusiastic passion for the job in hand and his total dedication to his clients.”

      Chambers UK