Protecting your business assets on divorce

Are business assets considered in divorce?

Yes.  Many people think that if a spouse has not been involved in a business that it will not be considered as a matrimonial asset on divorce.  This is not correct. 

The business will have a value, both as to capital and the income derived from it, which will need to be established and considered in the financial settlement arising from a divorce.  Usually, an expert accountant would be appointed to value the business.   

Can I be made to sell my business?

This would be a last resort of the Court but the family courts do have power to order the sale of a business, regardless of any Shareholder Agreement or business papers. 

The Court also have power to transfer shares in a business.  However, this would also be a last resort of the Court given the difficulties this may impose having a former spouse owning part of the business. 

How could I seek to protect my business in the event of divorce?

If you have a business and are thinking of getting married, then it may be worth considering entering into a Pre-Nuptial Agreement to seek to try and protect your business assets.  If you are already married, then a Post-Nuptial Agreement could be entered into.

What is a Pre/Post Nuptial Agreement?

A pre-nuptial agreement is a formal contract between a couple who want to protect their financial assets before they get married.  A pre-nuptial agreement is designed to regulate what should happen in the event the marriage breaks down and the parties divorce and can offer couples a form of security and certainty before they marry. With such an agreement, the division of financial assets can be made much simpler in the event of divorce.

A post-nuptial agreement is the same but entered into after a marriage has taken place instead of before.

Are Pre-Post Nuptial Agreements Enforceable?  

It is generally accepted that there are three essential features of a pre-nuptial agreement, namely independent advice for both parties, mutual disclosure of financial means and that the agreement should be the subject of periodic review.

Pre-nuptial agreements are not legally binding in the UK, meaning they can still be disregarded by the court if considered to be unfair. 

However, they are regarded as influential by the court. In the event that a married couple separate, either party may go before a court and seek financial orders dealing with their respective capital, pensions and incomes.  The present statutory provisions have been in place with fairly minor amendments for over 30 years and allow the courts to achieve an outcome which is considered to be “fair” between the parties based on the statutory factors and the case-law which has built up. The statutory factors which must be applied to every case are contained in what is called section 25 of the Matrimonial Causes Act 1973.

The present state of the law is therefore that a pre-nuptial agreement is a factor which may have some weight. It would probably be safe to say that intervening events such as the birth of children, ill health, changed financial circumstances or the passage of time would affect that weight. It is for these reasons that periodic reviews are recommended.

When deciding whether to uphold a pre-nuptial agreement the court will take into account whether the agreement is fair and reasonable, whether both parties agree and understand its implications, whether each party has disclosed their financial assets and debts and whether the agreement was drawn up at least 21 days before they got married (for Pre-Nuptial Agreements).

Our approach

Thursfields have built our reputation by providing timely and practical advice to our clients.  We understand that it can often be difficult to find the time to deal with personal matters.  With this in mind, we will tailor our approach to suit you and take your instructions in whatever way best suits you – by ‘phone, video conference or in person at our Birmingham, Solihull, Worcester, Kidderminster or Halesowen  offices. We have an excellent team of specialist personal, family and corporate solicitors to look after you, your family and your business.

More information

For more information please contact Jill Roberts on 0345 20 73 72 8 or

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