Ask the Expert: Part 4 | The legal process

In the fourth part of our Ask the Expert: Valuing a business for divorce series, we uncover how business valuations fit into the divorce timeline, from financial disclosure to final settlement.

Q: What’s the typical legal process for divorce in the UK?

It begins when one spouse (the Petitioner) files for divorce. If uncontested, the court issues a Decree Nisi, followed by a Decree Absolute six weeks later, which legally ends the marriage. However, financial matters – including business valuations – often take longer to resolve and should ideally be settled before the Decree Absolute is granted.

Q: Why is it important to resolve financial matters early?

Because the Decree Absolute only ends the marriage – it doesn’t stop financial claims. Issues like pensions, property, or business interests can still be contested afterward. That’s why it’s generally better to finalise financial agreements first.

Q: What happens if the couple can’t agree on finances?

The case goes through a structured court process: 

• First Appointment: The judge identifies what further information is needed. 

• FDR (Financial Dispute Resolution): The judge encourages settlement. 

• Final Hearing: If no agreement is reached, the judge makes a binding decision. 

Q: Where does business valuation fit into this process?

It’s part of financial disclosure, which is mandatory. Both parties must complete a Form E, detailing all assets and liabilities. For business owners, this includes at least two years of accounts – but providing more information can help reduce costs and delays.

Q: What are judges looking for in business valuations?

Judges want to understand not just the value, but also the liquidity of the business — can it generate cash to fund a settlement and/or ongoing payments? 

Q: What if the business is valuable but not liquid?

That’s a common challenge. A business might be worth a lot on paper, but not have the cash to buy out the other spouse. In such cases, a clean break might not be possible, and the parties may need to continue working together or share ownership temporarily.