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How can I best protect my business on divorce?

Legal Review with Coffin Mew

How can I best protect my business on divorce?

Stuart Duncan, a solicitor in the family team

Resolving financial matters on divorce can be a complex issue, particularly where there is a business to consider.

Once a divorce is underway, you must exchange financial information about all your assets, including any businesses.

In most cases the value of the businesses will be considered along with the value of the family home, savings, pensions etc.

The business itself can come under intense scrutiny and other people may have different ideas about how it should be valued and/or distributed.

This can be a problem if the liquidity was going to be used for future business development.

A divorce is something most people don’t anticipate or plan for, but it can be extremely bad for business if not handled correctly.

Before getting married:

  • Consider getting a pre-nuptial agreement to limit any claims against the business.
  • Also consider making a will to mirror the terms of any agreement, so it is clear how your interest should be dealt with in the event of your death.
  • Consider revising the terms of any shareholder or partnership agreements.
  • Also consider getting an appraisal of the business before marrying, so any appreciation during the marriage is clearly identifiable.

If you are already married:

  • Consider a post-nuptial agreement.
  • Nuptial agreements can be very persuasive in divorce proceedings, provided that each spouse has had independent legal advice.
  • Be sure to maintain good financial records and document any monies in or out of the business, including loans.
  • Consider sharing ownership of the business with third parties - If a business is owned exclusively by a spouse, it will be treated like any other asset unless there are good reasons not to. If the business is owned with other partners or shareholders, this is less likely.
  • Keeping your business independent from your private wealth can help to protect it.
  • In the case of a family-run business, consider the contractual terms that cover your working relationship and think about restrictive covenants you may wish to have in the event of a separation.

If a divorce is already on the horizon:

  • Get quick and clear advice from a specialist family lawyer.
  • Do not move assets or alter shareholdings unless there is a commercial reason for doing so. If the court feels you have done this to avoid a potential claim it could damage your credibility. The court has the power to prevent or set aside disposals of this nature.
  • Set your own agenda for any settlement discussions.
  • Consider alternative means to court proceedings, including mediation and arbitration, and seek expert advice at the earliest opportunity.

Stuart Duncan is a solicitor in the family team at Coffin Mew and can be contacted on (01635) 917508 or by email to

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Article comments

  • Guide Dog

    09/05/2018 - 13:01

    Charming fella divorce shouldn't be about stitching up your wife/husband