Companies & Divorce
The effect of businesses and companies on divorce settlements
In some cases divorce can involve the ownership of a business or limited company. During a divorce, the business will be dealt with as part of the financial settlement, whether it is a sole trader, a limited company or a partnership. The business needs to be valued as part of the full financial disclosure exercise.
My spouse said the business won’t be included in the settlement?
This is not true. The court will not disregard business interests and companies when it comes to ruling on divorce settlements. Courts are reluctant to interfere with the smooth running of a business or making changes to its ownership, but the business will be part of the proceedings as it usually forms a significant asset of the marriage.
How much is it worth?
This depends on what both parties can agree on. If they both have a different idea of what the value is, the court usually consults with an expert (a suitable accountant) to be instructed by both parties. The accountant will then examine the accounts and value the business after their findings. This may also show the judge what potential income the business can make to determine the financial settlement.
This can be a trying time for both parties as the business is such a livelihood and asset. When the income from the business is being assessed and what is seen as their financial security under scrutiny, emotions can run high. At MM Family Law, we will be there to guide you through the process and advise you on the best course of action to take.