Protecting business assets on divorce

Divorce and separation can have a profound effect on a business.

In some cases, one spouse may have built up a substantial business without any input from the other. This can lead to complex issues around the valuation of the business assets and how they may be viewed by the court in a financial settlement. It is not always 50-50 per cent.

The court will usually be reluctant to do anything to destroy the business’ ability to continue to trade successfully and it is therefore vital that great care is taken to ensure that the facts of the case are presented properly.

The method of valuation, for example net asset basis or price earnings ratio, is crucial, as are issues of liquidity.

Having large sums of money sat in a bank account can leave a business open to attack by a disgruntled spouse because the funds are more easily accessible. There are many ways in which solicitors and accountants can advise to increase or decrease liquidity in a business to protect a client’s interests.

Where business assets are concerned it is crucial to get expert advice as soon as possible when family problems arise.

For more information, or to discuss any aspect of family law, contact Damian Baron via email at damian.baron@harrison-drury.com, or call 01772 258321.