Under the Family Law Act, a business is considered property just like houses, cars, and investments. This means it is included in the asset pool when working out a fair division of property between parties.

The type of business may affect how it is treated:

• Sole trader: the business is closely tied to one person’s work and income.
• Partnership: both parties (or more) may share ownership and responsibilities.
• Company or trust: more complex structures with shareholders, directors, or beneficiaries to consider.

No matter the structure, the court will take the business into account as part of the overall settlement.

Placing a value on a business can be one of the most difficult aspects of a property settlement. Unlike a house or car, businesses are not always straightforward to appraise.

Valuation may consider:

• The business’s assets and liabilities,
• Its income and future earning capacity,
• Market conditions, and
• The personal efforts of the parties involved.

Often, a specialist forensic accountant or business valuer is engaged to provide an independent valuation. This helps ensure both parties have a clear and fair understanding of the business’s worth.

In many cases, one party wishes to continue running the business after separation.

To make this possible, settlements can be structured so that:

• One party buys out the other’s interest,
• Assets are divided in a way that allows the business to remain operational,
• Appropriate financial arrangements are put in place to protect employees and clients.

The court aims to divide property fairly while also recognising the importance of maintaining a viable business that supports income for one or both parties.

Businesses are treated as part of the property pool in a family law settlement, and their valuation can be complex. With the help of independent experts, courts and parties work to reach a fair outcome that considers both the financial value of the business and its ongoing viability. If you are separating and a business is involved, it’s important to get legal and financial advice early to protect your interests and plan for the future.