Property Settlement For Self Employed And Small Business Owners

If you are self employed or you own a family business, a property settlement carries extra moving parts. Cash flow still needs to meet wages and suppliers, customers expect continuity, and any assessment of the value of the business has to make sense in a family law context. This page explains how property is to be divided after a marriage or de facto relationship ends, what the family law courts expect, and practical ways to keep the business to continue while you reach an agreement with your former partner.

What counts as property when a business is involved

In family law, property includes much more than the home and savings. The property pool usually includes your interest in the business, plant and equipment, stock, intellectual property, loans between entities, superannuation and any family trust interests. These assets and liabilities are gathered into a single pool of assets so the court can oversee a fair distribution of assets.

The business might be a trading business run as a sole trader, a company or trust, a partnership, or a mix of structures. Sometimes the business is owned with third parties such as business partners, investors or including family members. The structure affects the evidence you need and the practical steps, but the aim is the same in every case – work out what the business is worth and how the property should be divided without damaging the enterprise.

How the court approaches dividing a business

When the property division is before the court, four broad questions guide the outcome:

1. Identify and value the asset pool. This includes deciding the value of a business and whether any goodwill is personal to the owner or part of the enterprise.
2. Assess contributions. Financial and non-financial contributions both count—years spent working in the business, parenting and homemaking, capital introduced by one of the parties, and support from extended family.
3. Consider future factors. The court will consider earning capacity, health, care of children and whether the business must keep operating to meet future financial needs of both households.
4. Check that the outcome is just and equitable. The court may adjust for risks like customer loss or key staff turnover.

Most matters settle without going to court. If you and your former partner come to an agreement, we document it by consent orders or a binding agreement. If agreement proves impossible, we file in the Family Court of Australia (now the Federal Circuit and Family Court of Australia) and ask the court for property orders.

Valuing the family business fairly

Courts prefer a single expert where possible because it reduces cost and argument. In most family law matters the parties jointly brief a valuer and provide the source records needed to decide whether the business has goodwill, how profits are generated and what risks sit ahead. Businesses are valued using methods that suit the type of business—for example, capitalised maintainable earnings for service firms, market multiples for recurring revenue, or asset-based approaches where equipment drives value. The expert will often cross-check using the sale of comparable businesses.

Our focus is the quality of information. We make sure there is full and frank disclosure so the expert sees the real picture. If records are behind, we rebuild them with bank feeds, ATO portals and management accounts, and close gaps with targeted requests or subpoenas.

Business valuation evidence checklist for property settlement

• Three years of financial statements and tax documentation plus year-to-date management accounts
• General ledger, stock reports and cash journals
• Customer and supplier concentration, lease terms and key staff dependencies
• Loan accounts, shareholder drawings and related-party transactions
• Copies of any shareholders agreement or partnership agreement

If one party disagrees with the expert, a shadow expert can test assumptions—owner wage adjustments, normalisations, or whether a discount for lack of marketability is justified.

Keeping the doors open during separation

The goal is straightforward: protect revenue while you design a fair way to split the division of assets. We help set interim rules about who is running the business, who approves payments and how drawings are handled so the asset pool is not eroded. If tension is high we seek interim orders about access to premises, data, vehicles and bank accounts to keep operations stable.

Cash-flow strain is common. If one spouse has stepped away or a partner wants to reduce drawings, we look at interim maintenance or an urgent distribution from the pool. Your contributions can be recognised even if you earn little at the moment because you paused your role to care for children or study.

Trusts companies and control signals

Where the family business sits in a family trust or a private company, control matters. Appointor powers, trustee company directorships and distribution patterns can show who really steers the enterprise. Loans between entities, unpaid present entitlements and shareholder current accounts need to be identified because they can change both the size of the property pool and how the distribution of assets should occur.

We also consider the impact on third parties such as lenders and external business partners. Where a shareholders agreement or partnership agreement sets transfer restrictions or buy-out rules, those terms shape the practical way to split the business interest.