How are businesses valued in divorce in Italy?

When a couple divorces, figuring out the value of any businesses or corporate shares that are part of one or both spouses’ assets can get tricky. The rules depend on the marital property regime the couple chose (usually joint ownership of property, unless they agreed otherwise) and how the business was set up and managed. The main legal references are the Civil Code articles governing joint ownership and its dissolution.

Immediate joint ownership vs residual joint ownership

Italian law distinguishes between two main categories of business ownership within marriage, each with different implications for valuation:.

1. Businesses in immediate joint ownership (Art. 177 Civil Code)

These are businesses that become jointly owned by both spouses from the start, either when created or purchased. There are two scenarios:

• Businesses managed by both spouses and created after marriage: Here, the business belongs 50/50 to both. At divorce, the business is valued as a whole to determine each spouse’s share, including physical and intangible assets (like goodwill), credits, and debts.
• Businesses owned by one spouse before marriage but managed jointly: The business remains the personal property of the original owner, but profits and value increases generated during joint management are shared. The valuation focuses only on these profits and growth, not the entire business value.

2. Businesses in residual joint ownership (Art. 178 Civil Code)

This is more common and more complex. It concerns businesses created after marriage and managed by only one spouse. During the marriage, the business is considered the personal property of the managing spouse, and joint ownership arises only at the dissolution of the marriage, usually at separation. At that point, the non-managing spouse has a right to a share of the profits and value increases accrued during the marriage.

Importantly, the Supreme Court clarified that this is a credit right, not ownership. The non-managing spouse receives a monetary payment equal to 50% of profits and increases, without claiming specific assets - allowing the entrepreneur to continue running the business without disruption.

How is a residual business valued?

The goal of valuation is to calculate the non-managing spouse’s share. Usually, a court-appointed expert (CTU) carries out the process:

1. Identify all business assets: Real estate, machinery, equipment, inventory, credits, etc.
2. Assess assets:
   • Tangible and intangible fixed assets, including goodwill, i.e., the company’s future earning potential.
   • Current assets, like inventory, client credits, and cash.
3. Assess liabilities: Debts to suppliers, banks, tax authorities, employees, etc.
4. Calculate net value: Total assets minus total liabilities.
5. Determine the share: The non-managing spouse is entitled to 50% of the net value.

The judge decides which valuation method to use (income-based, asset-based, mixed, or commercial relevance), often relying on technical appraisals.

Family business (Art. 230-bis Civil Code)

If a spouse actively works in a family business, they do not gain ownership but may be entitled to specific financial rights proportional to their contribution:

• Right to maintenance;
• Right to a share of the business profits;
• Right to a share of assets acquired with the profits, including goodwill.

Again, this is a credit right, paid when the work ends. The spouse claiming this share must provide evidence of the business assets and profits.

Corporate shares

Shares in companies purchased by one spouse after marriage are treated similarly to residual joint ownership. These shares remain personal during the marriage, but at dissolution, any value increases accrued during the marriage become subject to division.

At separation, the non-owning spouse is entitled to 50% of the value increase, calculated as a monetary credit - not a transfer of shares.

Summary

• Businesses may be jointly or personally owned, depending on how and when they were created and managed.
• In most cases, the non-managing spouse receives a monetary share of profits and value increases—not ownership.
• Valuation is carried out by experts and considers all assets, liabilities, and future earning potential.
• Corporate shares and family business contributions are also subject to financial compensation under Italian law.