What happens to a business in a separation?

A business is usually the most valuable and most contested asset in a separation, and the one where the two sides' numbers differ most.

It forms part of net family property

Your interest in a business is an asset like any other and must be valued as of the date of separation. That does not mean your spouse becomes a shareholder — in most cases the equalization payment is satisfied from other assets or paid over time.

Valuation is where cases are fought

Valuing a private company is a matter of expert opinion, not arithmetic. Goodwill, whether it is personal or transferable, normalised earnings, minority discounts and the treatment of redundant assets can each move the figure significantly. A single joint valuator is often faster and far cheaper than duelling experts, though it is not right for every case.

Income for support

Business owners face a second issue: the income used for support may not be the income on the personal tax return. Retained earnings, personal expenses run through the company, and dividend structures are all examined. Courts can attribute corporate income to a shareholder where it is not genuinely needed in the business.

Disclosure is not optional. Incomplete corporate disclosure is the fastest way to turn a manageable case into an expensive one.