Running your own business can be the fulfilment of a lifelong dream, but it also brings stresses which may contribute to relationship breakdown. It certainly adds complexity when trying to agree a financial settlement after divorce.

‘The challenge is to achieve a fair settlement without jeopardising the long-term financial health of the business,’ says Robert Bellhouse family law expert at Ware & Kay ‘Determining a valuation for any business takes skill and tends to be a more complex exercise than valuing other matrimonial assets such as the house or a pension.’

Like all other matrimonial assets, it will be necessary to obtain a valuation of the business. 

Reviewing a prenuptial agreement

Aware of the risks to a family business, founders sometimes encourage that younger members enter a prenuptial agreement when they get married to protect established business assets.

If you have such a prenup, then you will be to look at it and see what was agreed.  It is also possible for couples to have entered a postnuptial agreement after marriage, which may impact the business division in the same fashion as a prenuptial agreement can. 

Factors affecting the valuation

Business structure – it is essential for the accurate valuation of the business to understand its ownership structure – whether sole trader, partnership, LLP or limited company.

Employment – if one spouse is an employee of the business, rather than an owner, then it may be necessary to obtain employment law advice.

Business assets – a service may have fixed assets compared to an investment business with a portfolio of bricks and mortar or a manufacturing business with plant and machinery.  Invisible assets also need to be considered – such as goodwill and intellectual property.

Trading pattern – an analysis of historic trading profits and predicted future income will be essential. 

Disputing a valuation

It is not uncommon for a business valuation to be disputed during a divorce.  We have extensive experience in scrutinising business accounts and company structures and can advise you if an application to the court will be necessary.

Obtaining early expert advice is important in order that an accurate valuation can be obtained, and a fair settlement agreed for both spouses.

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