You and your partner built a business together, and now the relationship is over. The business keeps trading while everything else is in flux, wages still need to go out, clients still need to be served, and the two of you still have to make decisions together every day.
Under the Family Law Act, a business owned by separating couples is treated as property and forms part of the asset pool. According to the Federal Circuit and Family Court of Australia, there is no formula for dividing property, and the outcome depends on each couple's contributions, circumstances and financial position.
Our lawyers in Springfield help clients across Greater Springfield and Ipswich with property settlements involving businesses and partnerships.
Here is how business property is generally handled in a Queensland separation, and what the process looks like.
Key takeaways
- A business owned jointly generally forms part of the property pool in a separation.
- Married couples have 12 months from a divorce order to apply for property orders.
- Full financial disclosure of business records is required by the Family Law Act.
This article is general information only and is not legal advice. Every situation is different, and you should speak with a solicitor about your own circumstances.
Does a jointly owned business form part of the property pool in Queensland?
Yes, generally it does, according to the Federal Circuit and Family Court of Australia. Property includes assets owned individually, with another person, or through a family company or trust, and the courts can make orders about any of them regardless of when or how they were acquired. The business and its goodwill, stock, equipment and contracts are assessed as part of the total asset pool alongside the family home, savings and superannuation.
Legal Aid Queensland confirms that it may not matter whose name appears on the business registration or whose account business income flows into. What each person contributed to building the business, financially and through their labour, management and sacrifice of other opportunities, is assessed as part of the contributions analysis the Court is required to carry out under the Family Law Act.
What time limits apply when a business is involved in a property settlement in Queensland?
The time limits depend on whether the couple was married or in a de facto relationship, according to the Federal Circuit and Family Court of Australia.
- › Married couples: 12 months from the date the divorce order takes effect to apply for property or financial orders.
- › De facto couples: two years from the date the relationship broke down to apply for property orders.
- › Out of time: the Court may grant leave to apply after the limit has passed, but that is not guaranteed.
- › Divorce is separate: a divorce order does not decide property or business matters, according to the Court.
Where a business is involved, the time limit matters more than in a straightforward residential property case, because business value can shift significantly while a matter remains unresolved.
What does full financial disclosure involve for a business owner?
The Federal Circuit and Family Court of Australia requires each party to disclose all financial interests from the start of the pre-action procedure until the matter is finalised. For a business owner that typically includes the following, as set out on the Court's duty of disclosure guidance.
Documents commonly exchanged in a business property settlement:
- › The three most recent tax returns and notices of assessment for each party.
- › Recent business activity statements for any party with an Australian Business Number.
- › The three most recent financial statements for any company, trust or partnership either party has an interest in.
- › For a company: the most recent annual return listing directors and shareholders, and the company's constitution.
- › For a trust: the trust deed.
- › For a partnership: the partnership agreement.
- › A market appraisal of any item of property where the value is not agreed.
The Court may refuse evidence, stay or dismiss part of a case, or award costs against a party who fails to disclose. Running a business through a company, trust or partnership does not place it outside disclosure obligations: all entities a party owns or controls must be disclosed, including income distributed through them.
"When a business is part of the picture, what each person contributed to building it, including unpaid work, management decisions and time spent away from other income, is part of the contributions assessment the Court is required to carry out."
Jade Kickbusch, Principal, Brookwater Legal
How is the value of a business established in a property settlement?
Where the parties cannot agree on value, the Federal Circuit and Family Court of Australia takes the market value at the time the case goes to court, not at the time of separation. If both parties dispute the figure, an expert such as a forensic accountant or a business valuer may be engaged to prepare a report for the Court. The Court calls such a person a single expert where both parties use one report, and those reports are generally funded by one or both parties.
Running a business is itself treated as a contribution. According to the Court, non-financial contributions include the management of investments and the running of a business. A party who contributed to the business through labour, ideas or sacrifice of their own career while the other drew a salary may raise those contributions in the assessment.
Legal Aid Queensland confirms that the court can also make orders affecting third parties, for example to stop a bank from acting or to transfer responsibility for a debt. That can be relevant where a business carries loans in one or both names.
When does this process not apply to a jointly owned business?
Not every jointly operated business sits squarely within a property settlement in the way a co-owned house does. It is worth knowing where the process reaches and where it does not.
Situations where the picture may be more complex:
- › Family trust holds the business: assets held in a discretionary trust may be treated as a financial resource rather than property, according to Legal Aid New South Wales. Financial resources cannot be divided but are taken into account. The trust deed and who controls the trust matter considerably.
- › Partnership: a partnership generally ends when the people in it change, according to business.gov.au, and the partnership agreement governs what happens to assets and debts.
- › Company: shares in a company are property and must be disclosed. A director must tell ASIC within 28 days when a director or secretary is added or removed, according to ASIC, and a company can continue operating while the shares are dealt with.
- › Third-party involvement: the Court can make orders directed to a third party only where that party has been given procedural fairness and the order is just and equitable, according to the Family Law Act.
- › Priority Property Pool pathway: the Federal Circuit and Family Court of Australia notes that a streamlined pathway for smaller asset pools does not apply where the pool includes a company, trust or partnership owned or controlled by a party whose value is contested and requires expert investigation.
How does separating from a business partner in Ipswich or Springfield generally work?
The four steps the Court and Legal Aid Queensland describe:
- › Identify and value all property, including the business and any debts it carries.
- › Consider the contributions each person made, financial and non-financial, to the business and to the family.
- › Consider other relevant factors, including future earning capacity, age, health, care of children and the length of the relationship.
- › Decide on a division that is just and equitable, either by agreement or by court order.
Most couples do not need to go to court. The Federal Circuit and Family Court of Australia says parties who have agreed do not need to go to court, and the agreement can be documented through consent orders or a binding financial agreement. Consent orders are legally binding court orders; a binding financial agreement is a private contract made under the Family Law Act and requires each party to have had independent legal advice before signing.
How does a solicitor help when a business is part of the settlement?
Step 1: Talk to us
Get in touch and we will explain how the process generally works, what the time limits mean for a business settlement, and what the next steps look like.
Step 2: Gather and exchange financial information
We work with you to identify the relevant entities, locate the documents and prepare the financial disclosure the Court requires. Where business activity statements or financial statements are missing, we advise on how to obtain them.
Step 3: Establish value and explore agreement
Where value is disputed, we advise on the process for engaging a business valuer or forensic accountant. We then represent your position in negotiations, aiming to reach a fair agreement without going to court where that is possible.
Step 4: Document the outcome
We draft the consent orders or financial agreement, attend to any company or title transfers, and ensure the settlement is properly recorded so it is legally binding and enforceable.
| Get in touch Need help with separating from a business partner? We're an experienced team who keep you well informed at every stage of the process. Get in touch to discuss your needs. |
What are the most common mistakes when a business is involved in a property settlement in Queensland?
One of the most frequent errors is treating the business as separate from the property pool simply because it has always been "the other person's thing". The Federal Circuit and Family Court of Australia applies the same contributions framework regardless of whose name is on the ABN or the bank account.
A second common mistake is allowing the matter to drift without keeping track of time limits. The 12-month limit for married couples and the two-year limit for de facto couples run from specific events, not from when the parties first raise the topic of settlement. An application made after those limits generally requires the Court's permission, which is not automatic, according to the Court's own guidance.
A third mistake, particularly common in family business disputes, is disposing of business assets or distributing income through the entity before a settlement is reached. The Federal Circuit and Family Court of Australia requires disclosure of any property disposal made in the year before separation or since separation that could affect a claim.
Frequently Asked Questions
Is a business owned by one spouse treated as joint property in a Queensland separation?
It can be, according to the Federal Circuit and Family Court of Australia. It may not matter whose name is on the registration; contributions made by both parties to building it are assessed as part of the property pool.
How long does a de facto couple have to apply for a property settlement involving a business in Queensland?
Two years from the date the relationship broke down, according to the Federal Circuit and Family Court of Australia. An application after that date generally requires the Court's permission, which is not automatic.
Does a business held in a family trust form part of the property pool in Queensland?
It may be treated as a financial resource rather than property, according to Legal Aid New South Wales. Financial resources cannot be divided but are taken into account. The trust deed and who controls the trust are relevant factors.
What happens to a partnership when couples separate in Queensland?
A partnership generally ends when the people in it change, according to business.gov.au, and the partnership agreement governs what happens to its assets and debts. That process runs alongside, but separately from, the family law property settlement.
Does a business need to be sold in a Queensland property settlement?
Not necessarily. Many couples reach an agreement where one person retains the business and compensates the other through other assets or a payment. That depends entirely on the circumstances and what is just and equitable, according to the Federal Circuit and Family Court of Australia.
Do you need a solicitor when a business is part of a separation in Springfield or Ipswich?
Legal advice is not required to enter consent orders, but the Federal Circuit and Family Court of Australia says to get independent legal advice about the effect of proposed orders. Where a business is involved, disclosure obligations and valuation questions make family law advice particularly important.
Can consent orders be used to finalise a business property settlement in Queensland?
Yes. Consent orders are legally binding court orders and can cover how business interests, property and liabilities are divided, according to the Federal Circuit and Family Court of Australia. They have the same legal force as orders made at a hearing.
Your Next Steps
Separating when a business is involved adds layers to an already difficult process. In Greater Springfield and Ipswich, many couples run their businesses as a genuine joint enterprise, and the family law framework treats those contributions seriously. Getting the disclosure right, establishing a defensible value and documenting the outcome properly are where the difference is made.
If you're working through a separation involving a business, the right advice early makes the process simpler. Contact the Brookwater Legal team or call (07) 3437 8555 to talk through where you stand.
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External Resources
- Federal Circuit and Family Court of Australia – Financial or property overview
- Federal Circuit and Family Court of Australia – Financial or property: we cannot agree
- Legal Aid Queensland – Dividing your property fairly
- Federal Circuit and Family Court of Australia – Financial or property: we have agreed
- business.gov.au – Dissolve your business partnership
- ASIC – Add or remove a company officeholder
Brookwater Legal · This article contains general information only and does not constitute legal advice. It does not take into account your individual circumstances. You should obtain legal advice about your own situation before acting on anything in this article. Liability limited by a scheme approved under Professional Standards Legislation.
