What will happen to your business when having a divorce?
Whether you are someone who owns the business, or you are a spouse who has had no involvement, it is crucial to obtain advice at the outset as to how the courts will deal with this asset.
In most cases (if not all), there will be a single joint expert appointed in order to look at:
- What the capital value of the business (or part) is worth.
- What the liquidity is, i.e., if the court makes an order that the capital value is to be shared, how can it be extracted out of the business without damaging it.
- What income can be generated from the business.
A single joint expert is typically an accountant who is qualified and experienced to value businesses. One expert is appointed by both parties, and they remain independent. It is important that you choose the right expert, and the correct instructions are given at the outset. Once the report has been provided by the single joint expert, it is crucial that you can interpret the report and what is being said.
The single joint expert report
The information from the single joint expert will feed into the asset makeup of your case. It may be the only asset, or one of many. Such a valuation will form part of the disclosure process and then once that has been completed, you will be in a position to establish your entitlement from all of the assets with the business valuation forming one piece of the jigsaw.
It is not only divorcing couples that have their business impacted by the divorce. It may well be that you are a co-director, or joint shareholder, and you may be concerned about the impact of your fellow business owner going through a divorce and what the business will look like following that being concluded. Here at DTM we often advise co-owners on the impact of someone else going through the divorce process.
Because of our wealth of experience within this field, we work with and have experience of dealing with many single joint experts so we are in a position to point you in the right direction to propose which one would work best for your situation.