Is a Limited Company Protected From Divorce?


Divorce proceedings can be difficult at the best of times but they get a lot worse when we factor in things like businesses and companies.

In fact, it’s one of the more popular topics of divorce.

You might wonder what businesses and companies you own can be affected by a divorce. The truth is that there are certain situations where even a limited company isn’t safe from being dissected and split off to both parties. Let’s take a look at what you need to know.

What Happens During Divorce?

So, during the divorce, there are situations where a limited company can actually qualify as a marital asset. It largely depends on whether or not you started the business with your partner. If you did, they could be liable for half of the company.

Ultimately, it boils down to a proper examination of both individuals. It is necessary to conduct a proper financial assessment to reach the settlement that people need.

These factors can all vary a lot, between things like financial obligations, the needs of each party in question, their children, their living standards, and how they were before the separation took place.

How Limited Companies Are Treated

If one person owns the company before the marriage took place, then a person is entitled to put forward the idea that the company itself isn’t a shared asset within the marriage.

With that being said, the business is likely to be considered a proper financial resource within most situations. For the purposes of asset division, it’s all about the income-producing potential and value. They’re taken into consideration a lot when it comes to the division of finances in the right way.

It’s worth pointing out this doesn’t mean that the business needs to be sold, however, or that the spouse who didn’t have a stake in the business to start with is going to be given one through the divorce.

The more common solution is for the spouse who isn’t involved in business directly to be given a larger share of other assets between the divorcing couple. For example, the family home is often used to counterbalance the value of the business.

The exact division of assets will vary according to the situation, however. It all depends on what the pair of you own together.

Final Thoughts

So when it comes to divorce, it is important to acknowledge that a limited company doesn’t automatically come up for grabs when it comes to a divorce. There are a lot of situations where it can be necessary for people to try and divide up assets and the limited company can count in some situations. If you’ve not started the business with your partner then you do have more power and support. You should definitely seek legal support when it comes to the proper distribution of assets and we are happy to help with this. We have plenty of experience with divorce proceedings so please get in touch.





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