When you get a divorce, your assets need to be divided. This can become complicated if these assets include a business.

If you find yourself in this situation, don't panic. A good solicitor will be able to help you get the outcome you deserve, ensuring that your business's assets are divided fairly.

Nevertheless, it's a tricky area that could do with a bit more clarity. Even an amicable divorce can be stressful and the division of business assets can be fraught.

To that end, we've put together this jargon-free explainer article. We hope it helps you feel that little bit more confident about dealing with this issue.

Will I lose my business if I get divorced?

For many business owners or shareholders going through a divorce, this is the most important question.

The simple answer is that it's rare. The court can order the company to be sold but only if a dead end has been reached with the division of assets – and if the business isn't a main source of your income. 

The bottom line is that the court won't let a divorce diminish a person's standard of living. If the company does have to be sold, the court will offset the effects of this against other assets.

Why is the company structure important?

The structure of your business will determine how the assets are owned. In turn, this will affect how they're split, if at all, in the financial settlement.

If you're a sole trader, the business assets are yours alone. If you're in a partnership, the assets are shared. If your business is a limited company, business assets are owned by the company, not by individual directors.

Is a business a marital asset even if only one spouse owns it?

Yes. However, the weight it carries in court will depend on factors such as when the business was acquired and how much each spouse contributed to its growth.

How are businesses divided during divorce?

The short answer is "it depends". The bigger the business, the more complicated the process. It may be that lawyers and accountants will need to determine the value of the business and decide how it should be split.

In England, Wales and Northern Ireland, business assets can be considered to be matrimonial assets. In most cases, the business owner will be left with the business and the other partner will be compensated with other assets or maintenance payments.

This is a key point. Divorce doesn't necessarily mean that your business assets are at risk. It's unlikely that your business will be broken up or you'll lose your share.

How is the business valued?

For a financial settlement to be made, the court will need to know how much the business is worth. If the business is co-owned, either spouse can arrange the valuation. If just one spouse owns it, they will take charge of the process.

Valuation is complex and requires advice from an accountant. It takes into account income, standard of living, assets, pensions, the company's ownership structure and more.