Separating when you own a business creates unique challenges. Whether you run a small family company, hold shares in a growing enterprise, operate through a trust or manage a franchise, these structures become part of your property settlement under Australian Family Law.
In NSW, the Federal Circuit and Family Court of Australia (FCFCOA) can make orders that affect business ownership, control, income and assets. This includes companies, partnerships, trusts, franchises and professional practices.
This guide explains how the Court treats businesses during a separation, what happens to trust assets, how valuations work, and what business owners need to know to protect commercial stability. If you are navigating separation and own a business, speak with an experienced Family Lawyer Sydney for personalised guidance.
Yes. In Australia, a business is treated as property under the Family Law Act 1975. This means it forms part of the property pool, just like:
The Court considers both the value of the business and each party’s contributions.
A business may be:
Even if only one partner runs the day-to-day business, the other may still have a claim if they contributed financially or non-financially.
Business valuation is one of the most important steps in a property settlement involving commercial assets.
The Court typically requires an independent business valuation using one of the following methods:
1. Market Value (What Someone Would Pay for It)
Popular for small to medium enterprises (SMEs), cafés, retail stores and franchises.
2. Earnings/Income Approach
Based on profitability and cash flow.
Used for professional practices, trades and service businesses.
3. Asset-Based Valuation
Used where value comes from tangible assets (equipment, vehicles, inventory, tools).
4. Discounted Cash Flow (DCF)
Applied for larger enterprises or businesses with long-term projections.
A formal valuation avoids disputes and prevents either party inflating or minimising the value for strategic purposes.
1. Companies (Pty Ltd)
If a party is a director or shareholder of a company:
Courts can order a party to transfer or sell shares, or adjust personal assets to achieve a fair division.
2. Family Trusts and Discretionary Trusts
Trusts are common for tax and asset-protection purposes, but in family law they can still be scrutinised.
The Court considers:
If a party effectively controls the trust, the trust is often treated as property, not just a “financial resource”.
3. Partnerships
In partnerships (doctors, dentists, accountants, trades, family partnerships):
The Court cannot rewrite a partnership agreement, but it can adjust other assets to balance out value.
4. Franchises
Franchises operate under strict licensing conditions and may have:
Franchise valuation considers the business performance, brand, location, licence conditions and future earning potential.
The Court prioritises commercial practicality. Common outcomes include:
1. One Partner Keeps the Business
The most common result.
That partner receives the business and compensates the other with:
2. The Business Is Sold
If neither party wants it, or if running it together is unsafe or impractical.
3. Assets Are Split
For larger enterprises, one party may keep one division while the other keeps another.
4. A Party Steps Back but Stays a Shareholder
This happens in some family companies where both parties still rely on dividends.
Business owners must provide full and frank disclosure, including:
Attempting to hide or manipulate business income can lead to:
1. “My Partner Didn’t Work in the Business — Why Do They Get a Share?”
Because contributions include:
Non-financial contributions are recognised under Family Law.
2. Poor Record Keeping
Missing financial statements can slow the process and reduce credibility.
3. Personal Expenses Paid Through the Business
Courts examine whether these reflect true profits.
4. Undisclosed Income or Cash Payments
Forensic accounting may be used to discover hidden revenue.
5. Market Volatility
Some businesses fluctuate seasonally or during economic downturns.
6. Emotional Attachment
Business owners may overvalue the business compared to independent valuers.
When to Seek Legal Advice
Property settlements involving businesses can be far more complex than standard financial cases. Control, valuation disputes, trust structures, tax implications and commercial risk all require careful handling.
For tailored advice on protecting your business and achieving a fair settlement, contact a dedicated Family Lawyer Sydney. You can also learn more about our full range of services in Family Law.