Family business and divorce

Building a family business usually takes many years of hard work, including long hours and late nights, and sometimes time spent out of the home on business trips.  Nowadays, there is no getting away from technology and weekends, holidays and relationships can be spoiled by constant demands on an entrepreneur’s attention.   Meanwhile, marriage and family life suffer due to the pressures of business and a complete breakdown may end in divorce.

‘Agreeing a divorce settlement when there is a family business is complex as there may be wide range of considerations depending on the type of business,’ explains Helen Morgan, head of family law at Mooney Everett Solicitors in Ormskirk and Liverpool.

The courts are reluctant to order the sale of a business, so it is important for couples to try to reach an agreement that does not jeopardise the company.  Where couples have funded and built a business together this may be difficult to achieve for practical reasons, such as with a restaurant or small hotel which is also the family home.

When one spouse is an employee in the business and the couple can no longer work together, this raises another set of problems as British employment law does not allow a business to dismiss staff due to relationship breakdown.

Extracting cash from a business, for example to buy out a share of the family home, can have implications for business partners and there may be clauses in the partnership or shareholder agreement which need to be taken into account.

The value of a business will depend on a wide range of factors, and some business assets, such as land or a software start-up may be of little value now but have huge potential value in the future.  Company pension plans also require careful handling.

Tension often arises where one spouse has worked in the business and the other spouse has worked in the home.  The entrepreneur may be reluctant to give financial value to the home-maker for the support which enabled them to focus on the business, however this will be considered by a court if a settlement cannot be reached amicably.

‘Ultimately, you need specialist legal expertise to balance the financial needs of each person and any children over the short and long term, while trying to ensure that the business is not damaged in the process.’

For advice on any aspect of relationship breakdown and divorce, contact Helen Morgan, head of family law at Mooney Everett Solicitors in Ormskirk and Liverpool on 01695 574 111 or email email hidden; JavaScript is required


The contents of this article are for the purposes of general awareness only.  They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.   Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.