For an entrepreneur, the business is often the most valuable asset in the marriage, and the hardest to divide. It cannot simply be split in half without destroying its value, and it may involve co-shareholders, investors and employees who are not party to the divorce.
This article explains how a business is dealt with on divorce in South Africa, and what owners (and their spouses) can do to manage the risks.
It depends on how you were married
In community of property. The shares, member’s interest or business assets usually fall into the joint estate, and the non-owner spouse is entitled to half of their value on divorce. Because the joint estate is divided, the spouses must agree on who takes the business and how the other spouse is paid out, or the court may appoint a receiver and liquidator to divide the estate.
Out of community with accrual. The business belongs to the owner spouse, but any growth in its value during the marriage is part of that spouse’s accrual. If the owner’s estate grew more than the other spouse’s, the other spouse has a claim for half of the difference. Shares owned before the marriage count only to the extent of their growth, measured against the commencement value declared in the antenuptial contract (ANC). Assets excluded from the accrual in the ANC are not taken into account.
Out of community without accrual. Historically, the business stayed with the owner. That is no longer certain. Following EB v ER (2023), a spouse married without accrual may claim a redistribution order under section 7(3) of the Divorce Act, and courts can take a contribution to the growth of the other spouse’s business into account. See our article on divorce, pensions and redistribution.
What is valued?
If the business is run through a company, what forms part of the spouse’s estate is usually the shares and any loan account, not the company’s assets. The value of the shares depends on the value of the company as a whole and on the size and nature of the shareholding.
Valuation is often the most contested part of the case. Issues include:
- the valuation method, such as a discounted cash flow, earnings multiple or net asset value, depending on the type of business;
- goodwill, and whether it is attached to the business or personal to the owner;
- minority and marketability discounts for a minority stake in a private company that cannot easily be sold;
- loan accounts, both the owner’s loans to the company and any amounts owing by the owner;
- contingent tax, such as capital gains tax that would arise on a sale; and
- normalising the accounts, for example where personal expenses are run through the business or the owner’s salary is not at market rates.
Each side usually appoints its own valuation expert, and the court decides which approach is more reliable. Joint experts can save cost and reduce conflict.
When is the business valued?
In Brookstein v Brookstein [2016] ZASCA 40, the Supreme Court of Appeal confirmed that an accrual claim arises at the dissolution of the marriage. The value of each estate is therefore determined at the date of divorce, not at the date the summons was issued or pleadings closed.
This matters for a business. Its value can change considerably while a divorce is pending, and the owner’s conduct during that period, such as declaring dividends, moving value elsewhere or deliberately depressing profits, will be closely scrutinised. Up-to-date management accounts and valuations will usually be needed close to trial.
In exceptional cases, section 8 of the Matrimonial Property Act allows a court to order an immediate division of the accrual during the marriage, where a spouse’s right to share in the accrual is likely to be seriously prejudiced by the other spouse’s conduct.
Paying out an accrual claim without selling the business
An owner may have a large accrual liability but little cash. Section 10 of the Matrimonial Property Act allows the court to defer payment of an accrual claim, on conditions such as payment in instalments, payment of interest, provision of security or transfer of specified assets.
In practice, many settlements combine:
- payment over a period, secured by a pledge of shares or a bond;
- transfer of non-business assets, such as the family home or investments; and
- a dividend or loan account settlement through the company, after taking tax advice.
Protecting the business
Co-shareholders and investors. A shareholders’ agreement or memorandum of incorporation may restrict the transfer of shares, including transfers to a former spouse. Investors and co-founders should be aware of these provisions, and owners should ensure their shareholders’ agreement deals with divorce. See our articles on shareholder disputes and deadlock and shareholder and director disputes.
Your ANC. An ANC can exclude specific assets, such as shares in an existing business, from the accrual. Commencement values should be realistic and well documented. Spouses who want to change their property regime after marriage must apply to court under section 21 of the Matrimonial Property Act.
Trusts. Holding a business through a trust can protect it, but only if the trust is genuinely run as a trust. See our article on trusts and divorce.
Confidentiality. Divorce litigation can expose sensitive financial information. Confidentiality agreements, sealed records and arbitration of the financial issues may help.
For the non-owner spouse
If your spouse owns a business, early steps include:
- requesting full particulars of the value of their estate under section 7 of the Matrimonial Property Act;
- obtaining company financial statements, management accounts, tax returns and loan account records;
- appointing an independent valuation expert; and
- considering a Rule 43 application for interim maintenance and a contribution towards costs, especially if the business controls the family’s finances. See our guide on Rule 43 applications.
How O’Reilly Law can help
As corporate and commercial lawyers, we understand how businesses are structured, valued and funded. We act for business owners and their spouses in divorces involving companies, trusts and complex shareholdings, and we help owners structure ANCs and shareholders’ agreements to protect the business. Contact us to discuss your situation in confidence.
Related reading: Getting divorced in South Africa · Trusts and divorce
This article is general information and not legal advice. Valuation and tax issues require specialist advice. Correct as at October 2026.