Divorce - Business Assets

Whether a spouse runs a business alone or in a partnership, or has shares in a private company, the courts are reluctant to make an order which will destroy that business or its viability. If the business generates income from which maintenance is paid, it is very unlikely that a court will force its sale.

If capital is required from the business, the aim will be to find out how it can be released without destroying the business, for example by selling off some assets, or using the business assets as security to increase borrowing.

The court will only reluctantly consider forcing a sale of the business if it does not make enough profit to pay reasonable maintenance and there is no other means of raising an appropriate lump sum.

The businessman or woman has particular problems about disclosure. It may be difficult to work out the profits of a business especially if the accounts are not up to date, the business is in a period of change, and the stress of marriage breakdown has affected performance at work.

Detailed valuations are discouraged - they can be expensive and controversial, and a paper figure for the valuation of a business is irrelevant if the business is not to be sold. Some form of agreement about the value is, however, generally necessary if a fair settlement is to be reached.

The court does not give great weight to strict partnership or company law when no-one has an interest in the business other than the husband and the wife. If the wife has been involved for tax purposes only, or has contributed little in terms of work or capital, she may receive less than the wife who has built up a business as a true joint enterprise with her husband.