Getting Divorced When You Have A Sole Proprietorship

Getting divorced when you have a sole proprietorship

Do you have a sole proprietor or sole trader business? If you do and you are getting divorced, or considering a divorce, then you may have various concerns about what could happen to it. Read on to find out about what you need to know. 

The basics of businesses in divorce in the UK 

Generally speaking, a business, whether or not it was set up or managed by just you, or you and your spouse, will be considered a financial marital asset by the courts. As such, it will typically be included with all other financial assets in a divorce. Sottish businesses are different in this sense because they are only considered a joint asset if they were founded or started after the marriage commenced. A key basic to bear in mind, is that the courts will always try to keep a business with its owner in a divorce, and it is rare that you will be forced into a sale.

Is my ex-spouse entitled to some of my business? 

The answer to this is that it depends on your own unique financial circumstances and joint assets. As well as potentially your business, any properties, pensions and investments will be grouped together in the ‘matrimonial pot’ and considered together and divided. Therefore, in some cases, your spouse could be entitled to some of it. 

Detailed in the Matrimonial Causes Act 1973, are the criteria courts refer to when splitting all matrimonial assets. They will usually begin by looking at dividing everything 50:50. Dividing assets can become more convoluted when businesses are involved. For example, courts will consider whether or not the value of it has increased during the course of your marriage and also if it may be defined as a financial resource for both parties, or a non-matrimonial asset. 

Getting your business valued 

If you are unclear what the value of your business is, or would like to know where you stand, it could be worth getting it professionally valued. When this is needed, usually an impartial, forensic accountant is agreed on by both parties, to make a valuation. They will be able to provide you with different valuations, from when you started to where you are now. They will also look at the assets your business owns, and what both the profits and earnings are from it. 

How can I protect my business in a divorce? 

If the courts decide that your business is a matrimonial asset, then there are a few things you can do to protect it. Offsetting is a common approach. This is where you offer your former spouse more of the other matrimonial assets and in return, you ensure the business is yours. 

Post-nuptial agreements are one way forward if you are not yet married but want to protect your business in the event of a divorce. Although they are not legally binding, they do help to guide the courts when it comes to deciding on finances. Minimising involvement from your spouse in the business will help eliminate the possibility of your spouse stating that they had a significant role in the business and therefore make a claim. Also, it’s useful to try to keep your household and business finances as separate as possible during your marriage, so that it is clear that your business is separate from your marriage. 


Considering these basics is your starting point for knowing where you stand on divorcing when you have a sole proprietorship. To get more information on your specific case, it’s always worth contacting a family lawyer specialising in divorce. 


Please enter your comment!
Please enter your name here