Divorcing with a business: division and valuation

A divorce is an intense period, and if one of you owns a business, it also becomes considerably more complicated legally and financially. How do you divide the assets, who has which rights, and how do you make sure the business stays afloat? The consequences can be significant for both the entrepreneur and the partner. In this article I set out the main points under Dutch law.

Matrimonial property law and the business

Whether and how the business counts in the division depends on how you are married:

• Community of property (married before 1 January 2018). Without a prenuptial agreement, everything falls into the community, including the business. In a divorce, its value is in principle divided equally.
• Limited community of property (married from 1 January 2018). Only what you built up together during the marriage is divided. A business that already existed before the marriage in principle remains private. However, the increase in value during the marriage may play a role.
• Prenuptial agreement. This often states what is and is not shared. The business may then fall entirely outside the division, but that depends on the precise arrangements.

It is crucial to understand which rules apply to you. I guide you step by step and, where necessary, work with financial planners or tax advisers.

Maintenance with a fluctuating income

• Child maintenance. The costs of the children are divided according to financial capacity, so that the children notice as little as possible of the divorce. For entrepreneurs, financial capacity is harder to determine because income fluctuates.
• Spousal maintenance. The amount and duration depend on the difference in income and the financial capacity of both. With entrepreneurs, fluctuations in income and business results play a major role.

Read more about maintenance under finances.

Dividing the business

In the division, questions arise such as:

• How do you determine the value of the business?
• What if the partner has worked in the business for years without formal pay?
• What if a buyout is not feasible?

A sound valuation and a clear financial plan are needed to resolve this together. I help you reach a workable solution that does justice to the interests of both the entrepreneur and the partner.

Valuation is tailor-made

Determining the value of a business is often the hardest part. It is not just about current turnover, but also about expected profits, obligations, personal goodwill and the capital in the business. Sometimes it is necessary to bring in an independent expert for an objective valuation.

Moving on, properly arranged

A divorce always brings change. With the right preparation and guidance, you both know where you stand and the future of the business is safeguarded where possible. We also take the tax consequences into account. Also read your own business and divorce or more about divorce mediation.

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