Can My Wife Take Half My Limited Company

If you own a limited company and are going through a divorce or separation, one of the big concerns is what might happen to your business. It is common to ask whether your spouse, particularly your wife, could claim half your company. The answer depends on several factors, including how the business was set up, when it was established, and what role your spouse had in it.

This guide explains how limited companies are treated in divorce cases, what your legal rights are, and how courts in England and Wales approach the division of business assets.

Is a limited company considered a marital asset?

Yes. In the eyes of the family courts, a limited company is usually considered a marital asset if it was started during the marriage, or if it has grown significantly in value during the relationship. This is true even if the business is solely in your name or your spouse has never worked in the company.

If the company existed before the marriage, the court may distinguish between its original value and any increase during the marriage, but it still has the power to divide it fairly between the parties.

Does that mean she automatically gets half?

No. There is no automatic right to half of a limited company. UK divorce law does not work on fixed formulas. Instead, the court aims for a fair outcome based on the couple’s full financial circumstances.

The court considers:

• The value of the business

• Each spouse’s contribution to the business or household

• The needs of any children

• Income, assets and earning potential of each party

• Any pre-nuptial or post-nuptial agreements

In some cases, your wife may be awarded a share of the business, a lump sum based on its value, or other assets to balance the settlement. The court will try to avoid arrangements that destabilise the company or affect the livelihood of employees, but it can still make orders that impact the business.

What happens if my wife is a shareholder?

If your wife already owns shares in the company, she may be entitled to retain those shares, sell them, or receive a buyout. If she is not a shareholder, the court could order you to transfer shares to her as part of the divorce settlement, though this is less common.

In most cases, courts prefer to leave business interests with the person who runs them and compensate the other spouse with other assets, such as savings, pensions, or equity in the family home.

Can I protect my limited company during a divorce?

There are several steps you can take to protect your company before and during a divorce:

• Get a valuation: A professional valuation will be needed to assess the company’s worth. This helps determine what share, if any, your wife might be entitled to.

• Use a shareholder agreement: This can limit who can receive shares in the business and on what terms. It is more effective if put in place before any marital issues arise.

• Negotiate a financial settlement: You and your wife may agree on a fair division of assets without transferring business shares.

• Offer a buyout: You may be able to retain full control of the company by offering other assets in exchange.

• Get a pre-nup or post-nup: These documents are not legally binding but are taken into account by courts if they are fair and well-drafted.

If you are already separating, it is important to take advice early. The way you handle discussions around the business can have a big impact on the final outcome.

Real-world example

Mark owns a digital marketing agency set up five years before his marriage. During the marriage, the business grew significantly and now employs five people. Mark’s wife was not involved in running the business but supported the household during its early growth.

During the divorce, the court agrees that the business is a marital asset. Rather than awarding shares to his wife, the court allows Mark to retain full ownership but orders him to pay a lump sum reflecting her contribution and the business’s increased value.

Do I need to disclose the company’s finances in divorce?

Yes. You must provide full financial disclosure in any divorce proceedings, including business income, profits, assets, and liabilities. Hiding or undervaluing business interests can lead to serious legal consequences and may damage your credibility in court.

Does it matter if the company is limited or not?

A limited company structure does not shield the business from being considered part of the marital pot. While it does separate business liabilities from personal ones, it does not protect the value of the company from financial remedy proceedings in family law.

Final thoughts

Your wife will not automatically be entitled to half your limited company, but the business may be considered part of the assets to be divided in a divorce. How much she receives, and in what form, depends on your personal circumstances, the value of the company, and the outcome of negotiations or court decisions.

The best course of action is to take early legal and financial advice. With careful planning, it is often possible to reach a fair settlement that preserves the future of the business while meeting both parties' needs.