Family businesses on divorce

Valuing a business usually requires input from an accountant or specialist valuer, as well as a family lawyer with the right experience to guide you through the process. You don't have to manage this alone – we help coordinate the advice you need so the picture is clear and reliable.

The valuation approach will depend on a range of factors, such as the nature of the business, how it's structured, the market it's operating in and any tax implications.

What really matters is how the business value is factored into the overall divorce financial settlement. It may be possible to release funds from the business so one spouse can make a payment to the other. If this isn't an option, there may need to be an unequal division of other family assets to balance things out, or both of you may continue to hold shares in the business.

Our role is to help you understand the options, explain the implications clearly, and support you in reaching a fair and workable outcome for the future.

In this instance, your business may be treated as a non-matrimonial (pre-marital) asset, which can mean it isn't automatically shared. However, it will still need to be disclosed and considered as part of the overall financial picture. In England and Wales, the court's approach is driven by fairness and the statutory factors, including both parties' resources and needs.

In practice, the court will look closely at things like how long you were married, whether business income supported family life, whether one spouse's efforts (including as a homemaker/parent) enabled the other to grow the business, and how the business changed during the marriage.

Even if the original business started pre-marriage, growth in value during the marriage and the way the business was used can be relevant when deciding what's fair overall.

It's very unlikely you'll be forced to sell your business simply because of a divorce. What matters most is achieving a fair financial settlement between you and your spouse, not automatically breaking up or liquidating the business you've built.

In most cases, courts and those negotiating will look for ways to protect the ongoing operation of a business rather than forcing its sale, especially if it's viable and important to either spouse's future earning potential.

Alternatives to sale can include one spouse retaining the business while the other is compensated through other assets, offsetting business value against property or savings, or structuring payments over time.

When both spouses are involved in the same business, a divorce can feel especially complicated. It may be a shared source of income and future security, so decisions need to be handled carefully to avoid unnecessary disruption or conflict.

The key question is whether it's realistic and appropriate for you both to continue working in the business after separation. This can work well with the right structures in place, but sometimes ongoing involvement together may not be practical. This may mean it would be better for one person to step back or exit the business altogether. Factors such as your working relationship, day-to-day roles and the impact on staff and clients will all be relevant.

With the right legal and commercial advice, it's often possible to protect the business while giving each of you the stability and certainty you need to move forward.