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Divorce & family law - KBL Solicitors

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Divorce & Your Business

Divorce & Your Business
  • > Child Arrangement Orders
  • > Children
  • > Civil Partnerships
  • > Co-Habitation Agreements
  • > Financial Remedy Proceedings
  • > Just Living Together
  • > Living Together - the Future
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  • > Pre-Nuptial Agreements
  • > The end of a Relationship

It is important to distinguish between what might be described as “a job” from a business which has substantial assets and a sale value.

Many self-employed sub-contractors have taken accountancy advice and have set themselves up as a limited company for tax reasons. A carpet fitter or joiner in these circumstances does not have a “business” which can be valued. He has “a job”.

Moving slightly up from there is someone who perhaps employs three or four people and operates from rented property. Whilst he does have “a business” it probably has no saleable value being based largely on his personal contacts. The value of this “business” lies in its ability to produce income and pay maintenance if appropriate. Where there is a business which has assets and a substantial turnover however the situation is different.

As to whether or not it should be taken into account at all and if so to what extent are governed by Section 25 of the Matrimonial Causes Act and is dealt with elsewhere. If it is to be taken into account that is where the difficulties start.

Is it solely owned? A partnership? A limited company? Who owns the shares?

A lot of matrimonial disputes which involve companies themselves have internal disputes which have to be resolved before the husband’s (usually) interest can be quantified. Even today some partnerships do not have a written partnership agreement. Some companies do not have shareholders’ agreements in place. Sometimes shareholdings have been promised and the business has been run on that basis, but the position has never been formalised.

Once the business interest is quantified how is it dealt with? The phrase used until relatively recently was “you don’t kill the goose that lays the golden egg”. This meant that largely business interests were taken as a means of earning a living and would not be attacked. However, in N v. W the Judge said “the goose will have to be taken to market”. If the business could not raise funds it would have to be sold.

How can the value in the business be realised if necessary? How is the interest valued?

There are various methods and if the company is a substantial company you will have had the benefit of accountancy advice. Typical ways of releasing money from a business are:-

  • Cash reserves
  • Annuity payments
  • Dividends
  • Realising surplus assets
  • Sale of shares to an investor

None of this is very straightforward. There may be a number of people who all have an interest in the company who will not agree to a change in structure of the company. The court has no power to influence or to make orders in respect of third parties and the courts options may therefore be limited. Where there are sufficient assets, a court may make an order to “offset” other assets against the value in the business. What a court will not usually do is leave the shareholder with all the risk and the householder with all the solid risk free assets.

It is a complex area and one that requires detailed advice which will probably involve an accountant. If the value or liquidity of the assets is in doubt the matter is usually referred on a joint instruction to a jointly instructed forensic accountant who will usually produce a report. As you can imagine the costs involved in a dispute such as this can be substantial.

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What our clients say about us

  • KBL acted on my behalf during a long and drawn-out divorce. They were very supportive, professional and knowledgeable during the 18-month case and provided me with great reassurance throughout this difficult time.

    Mr Hulley
  • KBL offers pragmatic and effective advice with an exceptional degree of client care.

    Jonathan Warburton, Warburtons Ltd
  • I have instructed KBL in relation to a complex Employment matter. Sarah Collier is highly experienced in Employment Law. The client care provided by Sarah Collier and her assistant Sarah Taylor was exceptional and went over and beyond my expectations in the matter. A pragmatic approach was taken in the matter and I achieved the conclusion I was hoping for. Would definitely recommend KBL Solicitors.

    Ismail Limbada
  • We chose KBL due to their specialism in commercial property and their proven work with Max Spielmann stores.

    Steve Thompson, The Fragrance Shop
  • Gillian Hindle has worked on several legal matters for me and I have always found her advice to be sound, timely and crystal clear. In addition, she has always been unfailing polite, attentive and readily available. She is both a consummate professional and a delightful individual.

    Mr Martin Patrick
See more testimonials
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KBL Solicitors LLP, a Limited Liability Partnership. Registered in England number OC402496 VAT Reg. No. 421 8505 72 Service provided by solicitors of England and Wales Authorised and Regulated by the Solicitors Regulation Authority SRA Number 627254 www.sra.org.uk

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KBL Solicitors Bolton

New Mansion House
63-65 Chorley New Road
Bolton
BL1 4QR

Tel: 01204 527777 Fax: 01204 388940 E: enquiries@kbl.co.uk
KBL Solicitors Blackburn

12 Cunningham Court
Blackburn
BB1 2QX

Tel: 01254 268790
E: enquiries@kbl.co.uk

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  • Home
  • Business
    • Commercial Litigation
      • Bank & Financial Investment Mis-Selling
      • Business Disputes
      • Construction Disputes
      • Contract / Terms & Conditions
      • Intellectual Property
      • Manufacturing Disputes
      • Mediation
      • Professional Negligence
      • Property Litigation
    • Commercial Property
      • Academy Conversion
      • Acquisitions & Disposals
      • Compulsory Purchase Orders
      • Energy Performance Certificates (EPC’s)
      • Landlord & Tenant Matters
      • Land Tribunal Work
      • Leases
      • Licensed Trade Premises
      • Option Agreements
      • Secured Lending
    • Corporate & Commercial
      • Agency & Distribution Agreements
      • Banking & Lending Services
      • Business Sales & Purchases
      • Commercial Contracts
      • Group & Company Restructures
      • Company Formation & Registrations
      • Joint Ventures
      • Share Options
      • Shareholders’ Agreements
      • Terms & Conditions
    • Employment / HR Support
      • Confidentiality & Post Termination Restrictions
      • Defending & Preventing Harassment Claims
      • Discrimination
      • Employment Contracts
      • HR Advice Service
      • HR Training
      • Policies & Procedures
      • Redundancy
      • Settlement Agreements
      • TUPE / Business Transfers
      • Unfair/Wrongful Dismissal Claims
    • Insolvency
      • Directors Disqualification
  • Personal
    • Divorce & Family Law
      • Child Arrangement Orders
      • Children
      • Civil Partnerships
      • Co-Habitation Agreements
      • Divorce & Your Business
      • Financial Remedy Proceedings
      • Just Living Together
      • Living together – the future
      • Parental Responsibility
      • Pre-Nuptial Agreements
      • The end of a Relationship
    • Employee Rights & Disputes
      • Directors / Senior Executives
      • Discrimination in the Workplace
      • Redundancy Situations
      • Settlement Agreements
      • TUPE for Employees
      • Unfair Dismissal
    • Litigation / Disputes
      • Debt Recovery
      • Financial Services Disputes
      • Professional Negligence
      • Property Disputes
      • Probate Litigation
      • Residential Possession
    • Personal Injury
      • Personal Injury
    • Personal Insolvency
    • Property
      • Buying a house
      • Equity Release
      • Remortgaging
      • Residential Property Disputes
      • Selling a house
    • Wills, Trusts, Tax & Probate
      • Advice for the Elderly Client
      • Court of Protection
      • Inheritance Tax
      • Power of Attorney
      • Probate & Estate Administration
      • Probate Disputes
      • Trust Advice
      • Will Preparation
  • About us
    • Careers at KBL
    • Testimonials
    • Factsheets
  • Meet the Team
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  • Contact us
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