What business owners need to know
For many business owners, a company is far more than an asset. It is a source of income, long-term value and, often, a life’s work. If divorce becomes a possibility, understanding how the courts in England and Wales treat business interests can help you protect both your personal position and the future of the business.
How the court approaches a business
The court’s starting point is fairness. Where a business has been built up during the marriage, it is likely to be treated as a matrimonial asset, even if only one spouse runs it. That does not automatically mean the business must be sold, but its value will usually need to be taken into account.
Why valuation matters
A proper independent valuation is essential. This can be complex, particularly where there are questions over cash flow, liquidity, tax, minority shareholdings or the real market value of the business. The aim is not just to understand what the business is worth on paper, but what value can realistically be accessed without harming operations.
Practical ways to protect the business
The court will often look for solutions that avoid disrupting a successful business. These may include:
- One spouse keeping the business while the other receives other assets.
- Structured payments over time to reduce pressure on cash flow.
- In some cases, a retained interest until a future sale or exit event.
Steps business owners should take early
- Consider a pre-nuptial or post-nuptial agreement.
- Keep clear records showing what was owned before the marriage and what was built up during it.
- Review shareholder agreements and related documents to check whether they deal with divorce.
- Take legal advice early to reduce risk and uncertainty.
Specialist advice makes a difference
Early planning can make a significant difference to the outcome. At Field Seymour Parkes LLP, our Family team advises business owners on divorce cases involving complex and illiquid assets. If you would like tailored advice on protecting your business interests, please get in touch.
Article contributor, Liya Khwaja, Paralegal
