Divorce and the Family Business
Many of the matters we handle involve complex company and partnership interests. Our lawyers are well equipped to deal with cases of this type and where necessary, they will work in conjunction with our Business Services Department which can be invaluable in particularly complex cases.
Many couples derive an income from a family business in which one or both parties work and have a shareholding. When a couple divorce, the value of a shareholding may need to be established as a capital asset, in addition to assessing the income which it produces.
We have considerable experience of the following:-
- Understanding and analysing company accounts (balance sheet, profit and loss account and cash flow)
- Asking the right questions so that a comprehensive disclosure is provided
- Instructing accountants to value the business both in terms of its capital worth and future income
- Assessing the right basis of a valuation, for example, on maintainable earnings (for example in the trading company) or on an asset basis (where the net realisable value of the assets is greater than the capitalised value of the dividends and earnings or on dividends alone.
- If the shareholding is a minority, what discount should be applied?
- Is the company akin to a quasi partnership? In which case, should any discount be applied at all?
- What is the value of the underlying assets owned by the company?
- Issues of liquidity.
- Tax implications.
Without a proper understanding of the true value of a business, a fair settlement may not be reached.
Our lawyers are specialists in this complex area of law.