Entrepreneur and divorce

A divorce is a far-reaching and emotional event and can bring tension, uncertainty and upheaval. If you are an entrepreneur, that uncertainty may be even greater. What happens to my business if I divorce? Can I afford to pay maintenance? How do I ensure that the continuity of my business is not jeopardised? It is therefore important to obtain proper advice before and during the divorce proceedings. Avoid unnecessary setbacks and risks by seeking help in good time.

Before or after 1 January 2018

Married in community of property?

Did you marry in community of property before 1 January 2018?

In that case, your spouse is entitled to half of the value of your business. But what is the value of your business, and how is that calculated in the context of a divorce? This depends, among other things, on the form of your business. A small sole proprietorship where turnover is generated largely by the entrepreneur’s own efforts is valued differently, for example, from a private limited company (BV) with many employees, substantial profits and a strong reputation (goodwill). If the wrong valuation basis is used, the consequences for you as an entrepreneur can be significant. Your ability to run the business may be restricted and the continuity of the business may be jeopardised. It is therefore important to engage a divorce lawyer with knowledge of valuation methods, an understanding of business structures, and experience in these types of matters.

Did you marry in community of property after 1 January 2018?

If you married on or after 1 January 2018 without a marital property agreement, you are married under the limited community of property regime. If you already owned a business before the marriage, that business remains private. However, under Dutch law you may be required to pay a reasonable compensation to the community. But what counts as reasonable compensation, and how is it assessed on divorce whether you have complied with this statutory obligation?

The fact that your business remains private does not mean that, for an entrepreneur with a sole proprietorship, all assets used in the business are necessarily private. Suppose you have a company car. During the marriage you sell the car and use the proceeds to fund part of a new car. The remainder is paid from income. That income falls within the community. The conclusion is that the car has been paid partly from private assets and partly from community funds. What then? Seek advice tailored to your situation and the risks you face if you are considering divorce.

Did you marry under a marital property agreement?

Being married under a marital property agreement does not always mean that the business is outside the scope of the financial settlement. For example, you may have agreed a settlement clause (verrekenbeding). A settlement clause often provides that what has been saved each year (after paying household expenses) is shared at the end of the year. In practice, however, this settlement is often not carried out annually. The question then becomes what still needs to be settled when you divorce. The business may also be relevant in that context.