How is a limited company divided at divorce?

[industrial]

He started the company while we were married. Together 20 years.

He has valued the company as 'nil' on firm e. There are capital and reserves of over £300k in the accounts.

There is also machinery, vehicles etc.

Do I get half the capital / reserves (subject to it being divided 50/50) or half the value of the company?

I do have a solicitor but she is away this week so I'm trying to make sense of it.

The capital and reserves belong to the company, not to your husband. You don't have a claim on them. However, you do have a claim on the value of the company.

Thank you. Will this money be taken into account when the company is valued? He has purposely paid himself peanuts (apart from dividends)

Are you involved in the company as a shareholder? Are you named as a director or office bearer.

No I am not. It's just him.

Valuing a company is complicated. Depending on turnover, profits, etc. it may be worth more or less than its capital and reserves. But yes, they are taken into consideration when valuing a company.

Unless your a shareholder or have some role in the business, I'm not sure it comes into it at all.

Unfortunately I think I agree with Dandelion.

Thank you all for the replies. He's taken the company from £100k profit to £10k profit in a year to reduce its value.

So it looks like it's worth nothing (yo me). I years I worked full time and done all the childcare while he built it up too.

I'm sure the profit will return once we are divorced.

Spending some money on a forensic accountant might be worth while. Speak to your solicitor

@Dandelion1993 - The OP's husband has shares in his company. Indeed, it sounds like he owns 100% of the company. Those shares are an asset which must be declared and will be taken into account in the divorce settlement. That doesn't mean the OP will get 50% of the value of those shares. She may be entitled to more or less than that. And it is possible that the business has no value at all. But it definitely comes into the financial settlement regardless of the fact the OP does not have any role in the business.

My uncle is royally trying to screw my aunt over like this. Get a forensic accountant involved.

Thank you replying. He owns the company / director and shareholder. It's all his. Illl feel so much better when I know what my starting point is financially.

Is the company saleable or is it basically him? If he is a one man band and without him it won't function then yes it's value to be negligible. However the funds held as shareholders retained funds will have value

Limited companies are difficult and he could gift shares to others and appoint other directors which make it more,difficult

Be careful you don't blow more money than it is worth as lawyers at £300 plus vat an hour will soon deplete you

Industrial

I am in the same predicament, helped him set up new limited business, sold his house, used money for new premises and moved in with me and we got new business up and running. I did everything in office while he did manual labour, did all this while living together and not married. I stopped working in business once office was all set up to maintain relationship. Fast forward couple of years and we married, fast forward another couple of years and he moved back into a house he bought before we married just as I was diagnosed with MS. We’ve spend 3 years reconciling and trying to sort it but it’s final now. He’s rolling in cash and assets that are in his name only. He ditched me after diagnosis and just when we moved into a new house that I’d bought with money left to me. My solicitor isn’t keen to fight it, I really hope you get somewhere as I know how it feels as you helped push him forward - good luck 👍

How has he reduced the profits from £100k to £10k? Is he winding it down or is he taking the extra money himself as dividends?

Valuing a small company like that is really hard, especially if he is an integral part of it (ie providing the labour).

A company's value is basically based around its balance sheet - assets less liabilities then the profits are factored in. You need to see a copy of the full accounts I'd say for the last 4 years - not those at companies house as they will probably be the abbreviated ones which won't tell you anything. The full accounts will show what's gone on, the company's true position and where the money has gone.

Thank you @isleepinahrdgefund how do I access those accounts?

You'd have to ask him for them unfortunately. Or the accountant. As you're not a director or shareholder you have no right to see them. But if everyone is trying to come to a valuation then it would be ridiculous to do that without access to the full accounts.

There might be a means of requiring them to be produced for the divorce process - you'd have to ask your solicitor about that.

A limited version of a company’s accounts is available online via companies house.

@isleepinahrdgefund if I get access to his accounts (via a forensic accountant) what then? Will a judge say that he has deliberately lost the profit to skew the financial decisions in divorce? I don't know what the likely outcome will be.

Is it worth me spending money on an accountant or will I just end up with another bill and no recourse?

He is not taking them as dividends. He is only taking about £20k.

The companies house versions are so limited as to be worthless

You can pay to get full copies of accounts - if it's a ltd company he should send them you if you ask but in likeyhood he won't

The companies house versions are so limited as to be worthless

For many purposes they are, but OP was asking about the balance sheet, and that is available online.

Pizza....you can't for small limited companies as they are not submitted. They are to HMRC but these are not public