Can I Keep My Business After Separation? Practical Strategies for Australian Business Owners

Does Separation Mean I Lose Half My Business?

No. There is no presumption of equal division in Australian family law — not of the property pool as a whole, and certainly not of the business. The Court's task under section 79 (married) and section 90SM (de facto) of the Family Law Act 1975 (Cth) is to make an order that is just and equitable after working through the four steps below. For many owner-operated SMEs commercial reality shapes the outcome — the business cannot easily be cut in half, the parties often cannot realistically run it together after separation, and a common just-and-equitable solution is for the operating spouse to retain the business and to compensate the other from real estate, superannuation, cash or a structured payment over time.

That is a common pattern, but it is not the only one. In some cases — particularly where both spouses worked in the business and both want to continue — the business itself is sold and the proceeds divided. In others, a controlled exit is negotiated over a longer period during which the non-operating spouse remains a shareholder under a tight governance regime. The point is that the answer is engineered, not imposed.

Where the Business Fits in the Property Settlement

Property settlement after separation is governed by the Family Law Act 1975 (Cth), the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and the case law, including Stanford v Stanford (2012) 247 CLR 108 and Hickey & Hickey (2003) FLC 93-143. The Court's reasoning is commonly described in four steps — identify and value the property pool; assess each party's contributions; assess each party's current and future circumstances under section 79(5) (or section 90SM(5)); and consider whether the proposed division is just and equitable. For the business owner who wants to keep the business, three points from that framework matter most:

• The business is one asset in the pool. It is valued net of liabilities, usually by a single expert, and the retaining spouse keeps that value on their side of the ledger and must account for it to the other party.
• Business income is not counted twice. The operating spouse's continued ability to earn from the business is not itself property; once the business has been valued after a market salary, that earning capacity is relevant to the parties' future circumstances rather than being capitalised again as an additional capital amount — although it may justify an adjustment in the other party's favour.
• The final test is just and equitable. A division that leaves one spouse with the business and the other with the home and superannuation is frequently just and equitable. A proposal that leaves the other spouse with illiquid or deferred entitlements must be justified and properly secured.

For a deeper treatment of each step see The Four-Step Property Settlement Process in Australia.

How the Structure Affects Keeping the Business

The structure determines who legally owns the business, what has to be transferred or released for one spouse to keep it, what governs that transfer, and which tax and stamp duty consequences flow from the settlement. Whether a particular interest is property in the pool at all, and how the Court characterises each structure, is dealt with in our guide to business interests in a divorce property settlement; the following table and sections focus on what each structure means for the spouse who wants to retain the business.

Sole Traders

A sole trader has no separation between the operator and the business. The assets, liabilities, contracts, licences, goodwill and tax position are all personal to the operator. The pool includes the net business assets (plant and equipment, stock, debtors, work in progress less trade creditors and finance liabilities) plus any transferable goodwill — goodwill that would survive a change of owner. The operator's future personal exertion is not itself property, so the question is whether any maintainable profit remains after a market salary for the operator; where little does, the operator's income is relevant to the parties' future circumstances rather than to the pool.

Sole-trader settlements are often simpler to implement because there is no corporate vehicle to restructure and no shareholders' agreement to amend. The operating spouse retains the business and compensates the other from other pool assets — the family home, offset against superannuation, or a structured cash payment.

Companies

Private companies are the dominant Australian SME structure. The asset in the pool is the shareholding, not the company's underlying assets — the company is a separate legal person and its assets belong to it. Any order affecting a third party such as the company itself requires its own statutory basis and procedural fairness to that party. Keeping the business therefore means keeping (or acquiring) the shares: where both spouses hold shares or directorships, the settlement provides for the transfer of the other spouse's shares, their resignation as director and signatory, the release of personal guarantees given to the company's financiers and landlord, and the treatment of any director loan account.

For 100%-owned private companies the analysis is relatively simple — the whole equity belongs to the spouse (or to the spouses jointly) and is valued and transferred under a Court order or BFA. Where there are minority shareholders, the analysis is more involved: the spouse's shareholding is valued with appropriate discounts, the shareholders' agreement is reviewed for transfer restrictions, and the settlement structure must respect both the family law and corporate dimensions. See our guide on Shareholders' Agreements in Australia.

Partnerships

A partnership interest is the partner's right to a share of the partnership's net assets, goodwill, work in progress and undistributed profit, governed by the partnership deed and the relevant State Partnership Act (in Victoria, the Partnership Act 1958 (Vic)). The partnership deed's exit-pricing formula is relevant evidence and may affect realisable value, but it does not automatically cap the family-law valuation — the Court weighs it alongside other evidence of true market value (a common issue with old book-value or fixed-multiple deeds).

Settlement options commonly involve the operating partner retaining the partnership interest and compensating the other spouse, sometimes funded by a buy-out from the remaining partners or by external debt secured against the partner's interest.

Family Trusts (Discretionary)

Discretionary family trusts have no fixed beneficial ownership, and there is no fixed rule as to how a trust interest is characterised. The Court examines the deed, the powers of control (trustee and appointor), the rights of beneficiaries, the distribution history and the evidence in the particular case — applying Kennon v Spry (2008) 238 CLR 366 — and may treat the trust assets as property of a controlling spouse, as a financial resource, or as genuine third-party property. That characterisation analysis is explained in more detail in the companion guide on business interests linked above.

For retention purposes the practical consequence is this: where a spouse controls the trust that operates the business and the evidence shows the trust has been run for that spouse's benefit, the Court may treat the trust assets as that spouse's property — but that is a conclusion drawn from the deed, the rights it confers and how the trust has actually operated, not a rule. Keeping the business then generally means keeping control of the trust. What that requires is likewise deed-specific: it may involve the other spouse resigning as director of the trustee company or as appointor, releasing any loan account or unpaid present entitlement and, in some cases, a variation of the deed or beneficiary class — with a corresponding offset from other assets. Each step should be tested against the interests of other beneficiaries and third parties, the procedural fairness owed to a trustee before any order binds it, and the resettlement, CGT and duty consequences, before it is built into the Consent Orders or agreement.

Unit Trusts

Units in a unit trust are property consisting of the rights the unitholder holds under the trust deed — typically to income, capital and redemption on the deed's terms. Their value and treatment depend on those rights, any restrictions on transfer or redemption, who controls the trustee, the trust's liabilities and its underlying assets, rather than on a fixed share of the assets. Keeping a business held through a unit trust commonly involves the other spouse's units being transferred to the retaining spouse under a Court order or BFA, with CGT roll-over relief and stamp duty relief considered before the transfer is made. Hybrid trusts combining unit and discretionary features call for deed-specific analysis: the unit rights are valued on their terms and any discretionary element is characterised in the same way as a family trust.

Professional Practices

Professional practices — medical, dental, legal, accounting, financial planning, engineering, architectural — are commonly retained by the practitioner spouse, because professional licensing and ownership rules, and the personal nature of the work, often mean no one else can run them. Whether and on what terms that happens depends on the profession's ownership rules, the practice structure and any agreements with other principals, whether the practice or its goodwill is transferable at all, and the valuation evidence. A multi-partner firm with an assembled workforce, recurring fees, systems and brand may hold substantial transferable goodwill; a sole-practitioner practice may have little value beyond its net tangible assets if no maintainable profit remains after a market salary for the practitioner, in which case the practitioner's income is relevant to the parties' future circumstances rather than to the pool. Where a genuine surplus does remain after market remuneration, it can support goodwill value even in an owner-dependent practice.

Retention planning for a practice also has to deal with the layers around it: a service entity owning rooms, equipment and staff; an SMSF holding the consulting rooms or office; partnership or shareholder agreements with other principals, whose consent may be needed for any change; and restraint-of-trade and ethical obligations that affect whether clients could ever be transferred. Money held in a law practice trust account is held for clients or other entitled persons — it is not an asset of the practice, does not form part of its goodwill and must not be included as value available to either spouse.

Farming Businesses

Farming businesses raise issues unique to the agricultural sector. Land is typically the largest asset — often held by a separate entity or in intergenerational ownership; livestock and growing crops are valued at standard industry values; plant and equipment depreciates faster than book; water rights, share-farming agreements and grazing leases have substantial value; and seasonal cash-flow volatility makes any structured payment plan sensitive to the timing of harvests, slaughters or saleyard prices. Multi-generational succession planning often interacts with the separation.

Franchises

A franchise is valued as a normal SME but the franchise agreement governs transfer. Many franchise agreements: (a) require franchisor consent to any transfer of ownership, including between spouses; (b) charge a transfer fee; (c) impose minimum-standard requirements on the transferee; and (d) treat certain spousal arrangements as deemed transfers. The Franchising Code of Conduct disclosure obligations and the franchisor's consent process must be coordinated with the family law settlement timeline. See The Franchising Code of Conduct.

Start-ups

Pre-profit start-ups are notoriously difficult to value. The valuer typically considers: the most recent priced capital raise (post-money valuation); discounted cash flow modelling of the business plan with sensitivity analysis; and an analysis of the capitalisation table, including ordinary shares, preference shares, convertible notes, SAFE instruments and employee share schemes. The high valuation uncertainty often produces structured outcomes — a combination of a fixed payment, a future earn-out and a contingent payment on a defined liquidity event with a long-stop date.

Minority Shareholdings

A spouse who holds a minority shareholding in a third-party-controlled company faces a different problem: they cannot force a sale, cannot force a dividend, and may be locked into a long-term passive holding. The valuer applies discounts for lack of control and lack of marketability, the size of which is a matter of expert valuation evidence in the particular case (there is no fixed statutory or judicially mandated range), reflecting the absence of power. The settlement structure must respect this illiquidity — a buy-out from current resources may not be possible and a deferred or contingent payment arrangement is often necessary.

Shareholders' Agreements and Buy/Sell Agreements

Shareholders' agreements and buy/sell agreements are the corporate-law instruments that govern what happens when a shareholder exits. On separation they are relevant in two ways. First, they may restrict transfer of shares to a spouse (pre-emptive rights, consent requirements) and require negotiation with other shareholders. Second, an intra-family buy/sell agreement with an artificial pricing formula may be challenged in the family law proceeding — the Court is not bound by an intra-family formula that does not reflect market value.

Where the business has unrelated co-owners, a commercial buy/sell agreement with proper market-value mechanics will normally be respected and used as the framework for any exit. See our guides on Shareholders' Agreements and Buy/Sell Agreements Explained.

Valuation: What the Retaining Spouse Needs to Know

The value placed on the business determines the size of the offset the retaining spouse must fund, so the valuation is the single most important number in a retention strategy. In the Federal Circuit and Family Court of Australia that number ordinarily comes from a single expert — a forensic accountant jointly instructed by both parties, or appointed or directed by the Court, under Part 7.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The single expert provides a written report and answers written questions from both parties seeking to clarify it; a party may apply for permission to adduce other expert evidence on the same issue, and may cross-examine the single expert at trial. Parties may also engage their own advisory (shadow) expert to help test the report, provided that expert's opinion is not tendered without permission. The single expert's report is expert evidence: the Court weighs it with the other evidence and is not bound to adopt it.

Four points matter most to the spouse who intends to keep the business:

• Basis of value. Where there is no realistic market for the interest and the retaining spouse will keep drawing genuine benefits from it, the Court may assess value to the owner rather than a hypothetical sale price. That approach is context-sensitive and depends on the evidence; it is not automatic, and in some cases value to the owner and market value coincide. The retaining spouse should understand which basis is in play early.
• Owner's salary and double-counting. The business is valued after deducting a full market-rate salary for the operating spouse. The resulting value is a capital amount in the pool; only the salary is income for the purposes of the current and future circumstances assessment under section 79(5) (or section 90SM(5)). The same earnings stream should not be counted twice.
• Personal goodwill. Goodwill tied to the practitioner personally — the patients of a sole-practitioner GP, the clients of a sole legal practitioner — is approached cautiously, because a party's future personal exertion and earning capacity are not themselves property and a valuation should not simply capitalise the owner's future labour. Valuers commonly charge the business a full market salary for the owner's role and ask what maintainable profit remains: if little does, there may be little goodwill value to divide and the owner's income is instead relevant to the parties' future circumstances; if a genuine surplus remains after market remuneration, that surplus can support goodwill value even in an owner-dependent business. How that plays out depends on the evidence in the particular case.
• Notional tax and surplus assets. The valuer may deduct a notional tax liability where a hypothetical realisation would crystallise CGT, and will add surplus assets (cash, related-party loans, investment property held in the entity) and deduct deficit items. Each adjustment changes the offset.

The mechanics behind those points — fair market value versus value to the owner, capitalisation of future maintainable earnings, normalisation of EBITDA, the choice between earnings, asset and cash-flow methods, minority and marketability discounts, latent tax and the single-expert process — are explained in our detailed guide to valuing a business in family law proceedings. For valuation principles outside the family law context — succession, shareholder disputes and sale transactions — see Business Valuation in Australia.

Funding the Offset or Buyout

Once the business has a value, the practical question becomes how the retaining spouse funds the other party's share of the pool without crippling the business. The answer is commonly a combination of the following, in roughly this order of preference:

1. Equity in the family home and other real estate. The most common trade: the non-operating spouse retains the home (or a larger share of its equity) and the operating spouse retains the business. Where the home is sold, the split of the proceeds can be adjusted.
2. A superannuation split. A splitting order or agreement under Part VIIIB transfers part of the operating spouse's superannuation to the other party. This is often the least painful source of value for a business owner because it does not draw on the business's cash and can be implemented without a sale. Its usefulness depends on the other party's age and preservation rules.
3. Cash from refinancing. A lump sum funded by borrowing against the home, business real property or the business itself. The bank will require the settlement documents, updated financials and often a personal guarantee; the retaining spouse should test the proposed borrowing against the business's serviceability and existing covenants before offering it.
4. Staged payments over time. Where the offset cannot be funded up front, the balance can be paid by instalments from business cash flow. Section 80(1)(a) and (c) (or section 90SS(1)(a) and (d) for de facto parties) of the Family Law Act 1975 (Cth) allow the Court to order payment by instalments and to order that payment be secured, and the same terms can be agreed in Consent Orders or a Binding Financial Agreement.
5. A share of a future sale. For start-ups, professional practices approaching retirement or businesses with an anticipated exit, a smaller payment now plus a defined share of net proceeds on a future sale, with a long-stop date, can bridge a valuation gap.

Two cautions apply to using the business's own funds. First, if a private company pays the non-operating spouse directly, or lends money to the operating spouse to fund the payout, Division 7A of the Income Tax Assessment Act 1936 (Cth) may treat the payment or loan as a deemed dividend unless it is structured and documented correctly. Second, stripping working capital to fund a payout can breach bank covenants, damage supplier terms and reduce the value of the very asset being retained. A Chartered Accountant should model the after-tax cash position of each funding option before it is offered.

Staged Payments, Security and Default Terms

A staged payment is only as good as its security. The non-operating spouse will usually — and reasonably — require some or all of the following, and the retaining spouse should expect to give them in exchange for keeping the business:

• A registered mortgage or caveat over real property, or a security interest over shares or units registered on the Personal Property Securities Register.
• Interest on the outstanding balance, with a higher default rate if an instalment is missed.
• Acceleration and cross-default clauses — the whole balance falls due if an instalment is missed, the business is sold, or the retaining spouse becomes insolvent.
• A personal guarantee from the retaining spouse where the paying entity is a company or trust.
• Ongoing financial reporting until the balance is paid, and restrictions on dividends, distributions or new borrowing that would prejudice repayment.
• A long-stop date and a clear mechanism — typically sale of the business or the secured property — if the balance remains unpaid.

By way of illustration only: suppose the single expert values the operating spouse's company at an amount that, together with the home and superannuation, produces a pool in which the non-operating spouse's just-and-equitable entitlement exceeds the value of the home. A typical structure would give the non-operating spouse the home outright, a superannuation split to close part of the remaining gap, and the balance by secured instalments over a defined period from business cash flow, with the operating spouse keeping all shares in the company and indemnifying the other party against the company's liabilities and guarantees. The proportions and the instalment period differ in every case; the architecture is common.

Tax Considerations (General Only)

The tax position of a business interest is part of its value. The valuer typically accounts for tax in two places: as a notional tax liability deducted from the value of the equity (where a hypothetical realisation would crystallise income tax or CGT), and as an adjustment to normalised earnings (where the historical tax position is non-recurring).

For a deeper treatment of tax-affected commercial-law issues see our companion guides on Business Due Diligence and Share Sale vs Asset Sale in Australia. This guide is general only and does not constitute tax advice — engagement with a Chartered Accountant or registered tax agent is essential before any settlement is finalised.

Capital Gains Tax Considerations (General Only)

Two CGT issues dominate business family law cases:

1. Transfers between spouses. Subdivision 126-A of the Income Tax Assessment Act 1997 (Cth) can provide CGT roll-over relief for transfers of CGT assets between spouses under a Court order, BFA or arbitration award under the Family Law Act 1975 (Cth), where the transfer occurs because of the relationship breakdown and the statutory conditions are met — it is not automatic merely because an order exists. Where it applies, the transferor does not realise a CGT event; the transferee takes the asset at the transferor's original cost base and acquisition date.
2. Notional tax on hypothetical realisation. When valuing a business interest, the valuer often deducts a notional CGT amount to reflect that any future realisation of the value would crystallise a tax liability — particularly for shares with low cost bases or for businesses with substantial embedded gains.

The Small Business CGT Concessions in Division 152 may also be relevant on a future sale and can materially affect the after-tax outcome — but they cannot be assumed to apply and require specific advice.

Superannuation Interaction

Superannuation is property under Part VIIIB of the Family Law Act 1975 (Cth) and can be split between spouses by Court order or BFA. For business owners, superannuation is most relevant in two contexts:

• SMSF holding business real property. Many SME owners hold the business premises through their SMSF, leased back to the operating company under a section 71 (Superannuation Industry (Supervision) Act 1993 (Cth)) compliant business-real- property arrangement. On separation the SMSF trustee, members, and any limited recourse borrowing arrangement must be addressed.
• SMSF as a settlement vehicle. Superannuation splitting can be used as part of the overall pool adjustment, allowing the operating spouse to retain the business and compensate the other through a superannuation transfer rather than cash.

See our companion article on Superannuation Splitting in Divorce.

Loans from Family

Loans from parents, siblings or other related parties are commonly raised in business cases and equally commonly contested. The Court examines substance over form. Indicators supporting a genuine loan characterisation include: contemporaneous loan documentation; commercial interest terms; a defined repayment schedule; actual repayments consistent with the schedule; security or guarantees; and treatment consistent with a loan in financial statements. Indicators supporting a gift characterisation (or a sham) include the absence of any of the above, particularly where the "loan" appears only after separation.

Related-Party Entities

Australian SMEs commonly involve a web of related entities: an operating company, a service trust, a holding company, an SMSF, a property trust and one or more discretionary distribution trusts. Full disclosure of all related entities is required under the Family Law Rules. Where the retention plan requires a company, trustee or other related entity to do something — register a share transfer, amend a deed, release a guarantee — that entity may need to be joined as a party, and Part VIIIAA of the Family Law Act 1975 (Cth) (section 90AE for married parties, applied to de facto parties by section 90TA) empowers the Court to make orders binding a third party where that is reasonably necessary or appropriate to effect a division of property, the third party has been accorded procedural fairness and the other conditions in section 90AE(3) are met. Transactions designed to defeat a claim may be set aside under section 106B.

Asset Protection

Legitimate asset protection planning occurs beforeissues arise — when a business is started, restructured or transferred to the next generation. Common structures include holding the operating business in a company, holding business real property in a separate entity (often an SMSF or property trust), and holding investment assets in a discretionary trust. Such structures are more likely to be respected in family law where they pre-exist the separation and serve genuine commercial purposes. The Court is alive to the distinction between legitimate pre-existing structures — such as a multi-generational family trust genuinely controlled by an independent trustee — and structures used by one spouse to defeat the other's claim; the former are generally respected, the latter are addressed through the Kennon v Spry characterisation analysis or section 106B.

Asset protection planning after separation is generally not effective and may attract section 106B set-aside orders. Transfers, dividend payouts, artificial restructures and undervalue sales undertaken with an actual or constructive purpose of defeating the other party's claim may be set aside where the statutory test in section 106B is met — and they typically inflame the proceedings and damage the transferring spouse's credibility before the Court. For the spouse who wants to keep the business, the practical rule is simple: do nothing after separation that you would not be comfortable explaining to the Court.

Interim Governance: Running the Business Until Settlement

Between separation and final settlement, interim arrangements address who runs the business, how each spouse is supported and how the non-operating spouse is protected against value being moved out of reach. For the spouse who wants to keep the business, a sensible interim regime is not a concession — it keeps the business trading normally, preserves the confidence of the bank, landlord, suppliers and staff, and removes the other party's incentive to seek urgent injunctions. The most common features:

• Continuation of historical drawing patterns, periodic review.
• Joint sign-off on capital expenditure above a defined threshold.
• Prohibition on issue of new shares, units or trust distributions outside ordinary course.
• Provision of monthly management accounts to both parties or their accountants.
• Access to the data room — bank statements, BAS, tax returns, financial statements, contracts.
• Suspension of major commercial decisions pending valuation (sale, refinance, key hire, key termination).
• Where the other spouse is a director, shareholder, partner or trustee, an agreed protocol for board decisions, signatories and access to premises and systems — or an agreed resignation from the operating role with drawings preserved in the meantime.

Interim arrangements may be agreed by exchange of correspondence between solicitors, recorded in a short interim agreement, or formalised by interim orders under section 80 (or section 90SS for de facto parties) of the Family Law Act 1975 (Cth).

Consent Orders

Consent Orders are the dominant resolution mechanism for business cases. They are made by the Federal Circuit and Family Court on the parties' joint application, have the full force of orders made after contested hearing, and provide the most secure framework for transferring shares, units, business assets or trust interests. Where the statutory conditions are met, they also reliably enliven CGT roll-over under Subdivision 126-A and State stamp duty relief, though eligibility is not automatic and must be checked in each case. See Consent Orders in Australian Family Law.

Binding Financial Agreements

BFAs are private contracts under Part VIIIA (married) or Part VIIIAB (de facto). They do not require Court approval but each party must obtain independent legal advice, and the statutory formalities must be strictly observed or the BFA can be set aside. BFAs are useful where confidentiality is paramount or where the parties want to avoid Court altogether. See Binding Financial Agreements in Australia.

Consent Orders vs Binding Financial Agreement

Mediation

Mediation can work well in business cases, particularly where the disputes are largely quantitative — valuation, structure, payment terms — though its effectiveness depends on the case. Mediation can be arranged privately (with an experienced mediator, both parties' lawyers and, where useful, forensic accountants present) or take place within the Court process through a conciliation conference or court-ordered mediation. The pre-action procedures for financial proceedings in Schedule 1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 require the parties to exchange disclosure and make a genuine attempt to resolve the dispute before filing, unless an exemption applies (for example urgency or family violence).

Court Proceedings

Where settlement cannot be achieved, the matter proceeds in the Federal Circuit and Family Court of Australia. The procedural framework involves an initiating application, response and pleadings, a Case Assessment Conference, mandatory financial disclosure under the Family Law Rules, valuation by a single expert, interim orders if needed, a Conciliation Conference, mediation, and finally a defended hearing if necessary. The time from commencement to trial can be lengthy and depends on the Court's lists and the complexity of the matter.

Practical Strategies for Keeping the Business

The following strategies — deployed early — give the operating spouse the best prospect of keeping the business and settling on sustainable terms:

1. Take advice before separation is formalised if at all possible.
2. Maintain accurate, contemporaneous financial records — clean accounting through separation removes most disclosure disputes.
3. Continue to run the business in the ordinary course; avoid major non-ordinary decisions until interim arrangements are in place, and secure the banking, landlord, supplier and key-staff relationships the business depends on.
4. Conduct a properly scoped single expert valuation early — both parties benefit from a credible value anchor, and the retaining spouse cannot plan the offset without one.
5. Model the funding of the offset realistically — equity in the home, a superannuation split, refinance, vendor finance from existing shareholders or a staged payment over time with security — and test it against the business's actual cash flow and bank covenants.
6. Address tax consequences proactively with a Chartered Accountant — CGT roll-over, stamp duty relief, GST and superannuation interaction.
7. Coordinate the family law settlement with any shareholders' agreement, partnership deed, franchise agreement and SMSF documentation.
8. Pursue Consent Orders or a properly drafted BFA; avoid informal settlements that miss CGT and stamp duty relief.

Common Mistakes

The avoidable mistakes we see most often:

• Failing to obtain a single expert valuation, leading to dispute over value and ultimately trial.
• Under-disclosing related entities, loan accounts or trust distributions — disclosure breaches damage credibility and risk adverse costs orders.
• Transferring assets post-separation in a way that attracts section 106B set-aside.
• Relying on a buy/sell formula between related entities that does not reflect market value.
• Missing the 12-month (married) or 2-year (de facto) limitation period for property settlement.
• Settling informally and losing CGT roll-over and stamp duty relief.
• Treating a discretionary trust as if it were beyond reach, when the deed, control and distribution history may bring it within the pool on a Kennon v Spry analysis.
• Failing to coordinate the SMSF, shareholders' agreement, franchise agreement and family law settlement.

Keeping the Business: Bringing It Together

Keeping the business after separation is often achievable for Australian business owners. In practice the outcome is less often decided by a contest over whether the business is sold than by four practical things — keeping the business trading and under clear control while the settlement is negotiated, obtaining a credible valuation early so the size of the offset is known, finding a realistic way to fund that offset from the home, superannuation, refinancing or staged payments with proper security, and documenting the result in Consent Orders or a Binding Financial Agreement that is coordinated with the business's own documents and implemented tax-effectively. Owners who address those four things early, and who resist the temptation to restructure or move assets after separation, generally retain their business and reach a settlement that both parties can live with.

When Legal Advice Should Be Obtained

Engage a lawyer with combined family law and commercial experience at the earliest opportunity — ideally before separation is formalised, and certainly before any restructure, transfer, capital expenditure or material communication. The choices made in the first months after separation shape the entire settlement, and many are difficult or impossible to unwind once made. Parke Lawyers acts across Family Law, Commercial Law, Business Valuation, Trusts, Companies and Tax under one roof — a combination uniquely suited to business owners facing separation. See our service pages: Family Law and Commercial & Business Law. Reviewed by Jim Parke, Lawyer & Chartered Accountant.

Frequently Asked Questions