FAQs business interests

1. Q. My husband and I are both directors and shareholders in our company, is it true that the law will only value the business for the income it produces?
   
   A. No. The court will assess the value of the business, both as to income and any underlying value, often by reference to liquidity. Usually, it is possible to agree a way forward for the business, sometimes by using a shareholders’ agreement to regulate future conduct, sometimes by one of you buying the other out.
   
   
2. Q. My wife takes a small salary from her employer but as a shareholder she gets significant dividends. Is it true that her earning capacity is related only to the salary she gets?
   
   A. Her earning capacity is one of the factors that the law assesses in working out a fair division of the assets and income. All her income is calculated, including any dividends.
   
   
3. Q. On divorce, can we just rely on what the company accountants say the business is worth, or should we obtain a specialist accountant’s report?
   
   A. Even if your company accountant has dealt with the business for many years, if there is going to be a disagreement, then it is usual to ask a specialist forensic accountant to give a valuation. It is usually possible to instruct one such specialist as a single joint expert, and it is important that he/she has experience of giving court evidence.
   
   
4. Q. Does it matter if the structure is in fact a company, a limited liability partnership or an ordinary partnership?
   
   A. It is important that you establish what sort of business is involved, so that the correct procedures can be followed when separating your business interests out.