Family Law Solicitor
Woolley & Co Solicitors
Divorce is never easy and if you own a business, it does carry additional complexity. Over the past three decades, Mark Betteridge has advised many business owners considering separation. A common theme is that separation is approached with understandable anxiety: “Will I lose my business? “Will it have to be sold?” and “How do we value the business?” are common questions.
While every case is unique, there are some practical points worth understanding before taking any formal steps.
1.The court looks at fairness – not fault
In England and Wales, financial outcomes are driven by statutory principles of fairness. The starting point is full financial disclosure. The court will consider housing needs, income requirements, the welfare of any children, and the resources available to both parties.
For business owners, your business is usually treated as part of your marital assets, it includes business assets and ownership including shares, stakes or the full value of the business. Your business income and profits over the past three to five years (minimum) including your earnings, dividends, salaries and bonuses are all taken into account. Additionally, loans, overdrafts or other debts are factored in as well as your role in the business, whether you are an active director, partner or passive investor can all influence how income is assessed. Full disclosure is critical and there can be serious consequences for hiding assets.
2. Valuation is critical
Valuing a business for divorce purposes is not straightforward, and courts usually rely on independent expert valuations. There are several approaches that can be considered depending on the nature of the business.
A single joint expert (SJE) is commonly instructed to prepare a valuation report of the business to avoid disputes. The SJE will often be a forensic accountant, and they are appointed jointly by the divorcing parties to prepare an independent valuation to assist the court.
The asset-based method looks at what the business owns versus what it owes, essentially calculating its net assets. As the name suggests, this will be best for asset-heavy businesses such as those in manufacturing, construction, also businesses that are not profitable and for companies being liquidated.
The income-based method focuses on potential future earnings, estimating the present value of profits using industry-standard multipliers. This valuation is good for profitable businesses in professional practice or service-based businesses. This method reflects real earning power and is the most commonly used in divorce cases.
The market-based method compares your business to similar companies that have recently sold, providing a benchmark for its value.
Adjustments are often made to reflect practical realities. For example, illiquid assets, those that cannot easily be sold, may reduce the overall valuation. Courts are also mindful of the impact of selling a business, and protecting livelihoods of all concerned, see below.
3. Sale is not inevitable
One of the most persistent fears is a forced sale of the business. In reality, courts are generally reluctant to disrupt a viable business if there are alternative solutions. These may include structured settlements, deferred lump sums, offsetting against pensions or other assets, refinancing, or in some cases continued joint ownership for a period. Early legal advice often opens options that are not immediately obvious.
4. Partnership and company structures matter
Many businesses operate as partnerships or limited companies. The legal structure significantly affects how interests are assessed. Partnership agreements, company articles and trust arrangements should be reviewed at an early stage. Where documentation is outdated or informal, uncertainty increases, both commercially and emotionally.
It’s also important to clarify whether the business is marital or non-marital. Important issues include whether the business started before marriage and whether marital funds were used to grow it.
Other considerations are whether the non-owner spouse contributed (financially or otherwise) and if the business has increased in value during the marriage. Even if ownership predates marriage, the increase in value during the marriage may be divisible
5. Timing and communication are crucial
It is important to take advice before making financial decisions, transferring assets or agreeing informal arrangements. A measured, informed approach usually preserves more value, financially and personally, than a reactive one. Divorce involving a business demands sensitivity to both family and business realities. With the right professional input, it is often possible to achieve a fair outcome while safeguarding the future of the enterprise.
Mark offers a free initial 30-minute conversation for those who would like to understand their position before taking the next step. You can call on 01992 210779 or request a callback via the website.
About Mark Betteridge
Mark Betteridge is a family law solicitor with over 36 years’ experience, specialising in divorce, financial settlements, and contentious probate. He has handled high-net-worth cases and complex inheritance disputes, including assets exceeding £250 million, and has particular expertise in business, farming, and expat matters. Known for his calm, pragmatic approach, Mark balances robust representation with constructive, solution-focused guidance, supporting clients through both litigation and alternative dispute resolution.