What Happens To My Business When I Go Through A Divorce?
When deciding how to split the matrimonial financial pot, there are many aspects that will be taken into consideration, both regarding capital and income.
This also includes any business asset, as you are required to provide full and frank financial disclosure of all financial assets, whether in your sole name or joint. You should be aware that business assets also include any share in a limited company, interest in a partnership and assets of a sole trader.
The Court will want to know the value of your business, but of course this is quite tricky. It is much more complicated than say a valuation of a property. When you provide your estimated valuation, this can be supported by evidence from your accountant. If the estimate is disputed, then an expert accountant can be sought to value the business, taking into account the turnover and any debts.
Remember, even if the business is very valuable to you emotionally, this may not reflect the same financially.
You should note, however, that the Courts will treat business differently to other assets such as cash and property.
The Court will also take into account individual facts of the business, such as, by way of example, if the business was set up prior to the marriage and therefore being a premarital asset. On the other hand, if the business was set up by one party but during the marriage with full support of the other party, then it could be argued it was a joint venture.
It is unlikely that the Court will order that a business be sole unless there is absolutely no other way of satisfying the financial claim before the Court through distribution of other assets.
It is very important to be aware that every matter is different.
This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a person fully qualified before decisions are made and before you embark on a certain course of action.
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