Disclosing business interests in Form E

why is the form e important?

In financial proceedings upon divorce, the Form E is the most crucial document. It is a financial statement that outlines your entire financial situation, including assets, liabilities, income, and expenses. The aim of this is to provide a complete picture of the financial position of each party in a divorce case and is used to help the court make decisions about financial settlements. 

disclosing business interests

Business assets such as shares in a limited company, interest in a partnership and business assets of a sole trader will be considered to be part of your relevant assets. Part 3 of Form E requires you to provide details on these business assets and directorships.

You are required to provide copies of the business accounts for the last two financial years, along with any documentation used to estimate the current value of your interest, such as a letter from your accountant or a formal valuation, if available. Additionally, you may be required to provide further information, including company forecasts, profit and loss accounts, draft financial statements, incorporation documents, budgets, annual returns, and more.

You must also supply information on any directorships you hold or have held in the last 12 months.

obtaining a business valuation

The usual practice is to instruct an accountant with no prior knowledge of the company, but with knowledge of the sector, and it may be appropriate to instruct the accountant not just to value an interest in the company but also to address issues of liquidity and future maintainable income.

Valuations of private companies should be approached with caution and were described as ‘among the most fragile valuations which can be obtained’ by Moylan J in H v H.

There are many different methods of valuing a company – for example by assets, earning basis or market value based on the value of similar companies. The appropriate method will depend on the company concerned and the sector in which it trades.

If you are going through a divorce and business assets are involved, Vardags can help. Click below for a free initial consultation with one of our expert divorce solicitors.  

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