Special considerations for business assets
Special considerations for business assets

The following Family practice note provides comprehensive and up to date legal information covering:

  • Special considerations for business assets
  • Non-matrimonial/civil partnership assets
  • Piercing the corporate veil
  • Sale of the business
  • Transfer of shares
  • Expert evidence
  • Practical considerations

Business assets, whether in the form of shares in a limited company, an interest in a partnership or LLP, or those of a sole trader, will be considered part of the relevant assets of the relationship alongside other property or investments. Unlike land/buildings, bank accounts and investments, an interest in a business can be difficult to value and is usually, by its very nature, illiquid.

Practitioners may fall into the trap of simply looking at an interest in a business as an asset that needs to be valued by an accountant. That asset is usually then added into the balance sheet along with the other assets owned by the parties. However, it can be useful to look at a business asset as a resource: how much money can be drawn from that business to fund a financial settlement on divorce, and how much income could the business produce in the future? This latter issue often needs to be addressed when quantifying maintenance.

A further issue to consider is whether certain company assets may not be owned by a spouse, as described by Lord Sumption in Prest v Petrodel Resources, ‘subject to limited exceptions…a company is a legal entity distinct from its shareholders’. See: Piercing the corporate veil and News Analysis: Prest—Divisional divide.

It is particularly important to acknowledge that the value of an interest in a business

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