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How to protect your limited company from divorce

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Divorce is never easy, and it can be especially challenging for business owners who have worked hard to build and grow their business. One of the key concerns will be whether or not the business is protected in the event of a divorce.

Business owners are often uncertain whether their company is considered a marital asset or not, and if so, how it will be valued and divided in a divorce settlement. It’s important to reach an outcome that works for you and your family while safeguarding your business and financial interests.

The good news is that there are steps you can take to protect your limited company from divorce. Baker Law is dedicated to providing you with the right legal guidance and support at every step.

Is a limited company protected from divorce

A limited company is not automatically protected in a divorce under UK law. In the eyes of the court, the company may be considered a marital asset and, as such, subject to division during a divorce settlement.

Whether or not a limited company is considered a marital asset will depend on the specific circumstances of the case, including the nature and extent of each spouse's involvement in the company and their contributions to its growth and success. Ultimately, it is up to the court to decide. Divorce can have a significant impact on a limited company, particularly if one or both spouses have a stake in the business.

Fortunately, there are steps that business owners can take to protect their company and its assets in the event of a divorce.

How is a company valued in a divorce?

It is important to get a fair and accurate valuation of your business to ensure the divorce financial settlement reflects the reality of your situation. Divorce finances of both parties are evaluated and distributed based on factors such as individual needs and financial obligations, as well as the needs of children. Sometimes, determining the value of divorce entitlements can lead to disputes, especially if one partner has sole or majority involvement in a company.

Valuing a company during divorce settlements will depend on the nature of the business, its size, assets, liabilities, and income, and the contributions made by each spouse to its growth and success. That value is typically determined by an expert valuer, appointed either jointly by the parties or by the court.

How to protect your assets in a divorce

There are several ways you can protect yourself in matters concerning a limited company and divorce. In all cases, it is important to seek professional legal guidance from expert divorce solicitors. Certain solutions will depend on the legal agreement made between two individuals prior to marriage. Other solutions can be arrived at through careful negotiation.

Some of the ways you can protect your business include:

  • Prenuptial or postnuptial agreements: Business owners can protect their company's interests and ensure a fair settlement by establishing agreements before or after marriage. These agreements can outline how the company should be dealt with in the event of a divorce, such as how its assets should be divided.
  • Shareholders' agreement: This is a legal agreement between the shareholders of a company, which can include provisions that protect the company in the event of a divorce.
  • Family trust: Establishing a family trust can protect the assets of the company and limit the exposure to the divorcing spouse.
  • Consider insurance options: Business owners can consider taking out insurance policies that can help cover the costs of divorce settlements, including the value of the business.
  • Consult with your solicitor: Divorce settlements involving limited companies can be rather complicated. Consulting with a legal professional who has experience in business and family law can help business owners understand their options and make informed decisions to protect their company in the event of a divorce.

Speak to our solicitors in Farnham, Surrey about protecting your limited company in the event of a divorce

Divorce settlements involving limited companies can be rather complicated. Should you be worried about how your business will be impacted by divorce, please speak with our solicitors who provide tailored expert advice to your unique circumstances

You can contact your local BakerLaw office or email us at

Please note, this is intended for general information purposes only and should not be taken as legal advice. If you need legal advice concerning breach of contract matters, please get in touch with your local BakerLaw office or email us at