Managing risk is an essential part of any business operation and while personal relationships do not often appear high on a business risk register, an acrimonious divorce has the power to devastate a small business.

‘While few anticipate or want to believe their own marriage will break down, sadly recent statistics show that over a third of all marriages end in divorce,’ says Robert Bellhouse, family law expert at Ware & Kay in York. ‘It is not uncommon for directors of a family business to insist that members of the next generation enter into a prenup before they get married, in order to protect the business assets.’ 

It is sensible for all entrepreneurs to consider a prenuptial agreement if they are thinking of getting married or entering a civil partnership.  This provides important protection for any assets which have been built up prior to the marriage, and any contributions to the business that are made at the time of marriage.

It will be necessary to agree a financial settlement as part of a divorce, with the wealthier spouse often having to provide for the other person.  A divorce can have an impact on fellow partners or shareholders, family members and employees who rely on the business

How is a business considered within the financial settlement?

A business is an asset which will be taken into account during the calculation of the financial settlement.  Your business will need to be valued by an independent accountant which will involve disclosing your business accounts and assets.

Once a valuation has been placed on your business it will be considered as part of the overall matrimonial pot, which needs to be fairly shared.

Fortunately, the courts recognise the importance of enabling a business to keep trading, and they tend to be keen to allow businesses to continue as a going concern.  This then means that you may need to trade off an interest in another asset, such as a pension or the matrimonial home, in order to keep your business intact.

We can advise you on what is a realistic division of your business depending on your circumstances and what other assets are held. 

For further information, please contact Robert Bellhouse on York 01904 716000 or email