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Guide · Financial Disclosure

Form E Business Assets: How to Declare a Business

📅 Updated May 2026 ⏱ 7 min read 📍 England and Wales only ⚖ Not legal advice

Declaring a business interest on Form E is one of the most complex parts of financial disclosure. Whether you are a sole trader, company director, or partner in a business, the court needs to understand the value of your interest and what income it generates. Here is how to approach it.

Section 2.2where business interests are declared on Form E
3 yearsof accounts typically required
Forensicaccountants often instructed for complex businesses

Where business assets appear on Form E

Business interests are declared in Section 2.2 of Form E. This covers any business you own, are a director of, or have a shareholding in — including sole trader businesses, limited companies, partnerships, and LLPs.

The section requires you to state the nature of the business, your interest in it, and your best estimate of its current value. You must also attach supporting documents to evidence that value.

What documents are required?

Business typeDocuments required for Form E
Sole traderLast 3 years' accounts or tax returns; SA302 forms; business bank statements for 12 months
Limited company (director/shareholder)Last 3 years' company accounts (filed at Companies House); management accounts if more recent figures are available; details of your shareholding and any director's loan account
Partnership or LLPLast 3 years' partnership accounts; your share of profits; the partnership agreement if relevant
Any businessDetails of any outstanding loans to or from the business; any property owned by the business
💡 Management accounts can be more useful than filed accounts Filed accounts at Companies House can be up to 18 months out of date by the time of your Form E exchange. If your accountant has prepared more recent management accounts, attach these as well. They give a more current picture of the business's financial health and reduce the likelihood of a questionnaire asking for up-to-date figures.

How to value a business for Form E

Valuing a business is more complex than valuing a property. Form E asks for your best estimate, but that estimate needs to be credible and supported by evidence. The most common valuation approaches are:

Earnings-based valuation

The most widely used method for trading businesses. The business's maintainable earnings — typically the average profit over three years — are multiplied by a sector-appropriate earnings multiple. The multiple varies enormously by industry, size, and growth prospects. A simple professional services business might attract a multiple of 1–2x earnings; a fast-growing tech business could be much higher. This approach requires an accountant's input to apply correctly.

Net asset valuation

More appropriate for asset-heavy businesses or property-holding companies. The net asset value is the total assets of the business minus its liabilities. This is often the starting point where the business's value is primarily in its balance sheet rather than its trading profits.

Dividend yield basis

Used for minority shareholdings in private companies where the shareholder has no control over the business and receives income only through dividends. Less common in divorce cases but occasionally relevant.

Business owner reviewing financial accounts and documents

Three years of accounts are typically the minimum required for a credible business valuation on Form E.

⚠ Do not just use the balance sheet net assets as the value Many business owners assume the value of their business is simply what is shown on the balance sheet. This is rarely correct for a trading business. Goodwill, intellectual property, client relationships, and future earnings potential are all relevant and are not captured in a simple balance sheet figure. Courts and opposing solicitors will probe any valuation that appears too simple or too low.

What about a director's loan account?

If you have a director's loan account — money owed to you by your company — this is an asset that must be declared. Conversely, if you owe money to the company (an overdrawn director's loan account), this is a liability. Both must be disclosed in Section 2.2 and cross-referenced with the company accounts.

Income from a business: where it goes on Form E

Your income from the business — whether salary, drawings, or dividends — is declared separately in Section 3 of Form E, not in Section 2.2. For the business asset section, you are disclosing the capital value of your interest. Your income from that business is disclosed separately. Courts look at both — the capital value of the business and the income it generates for you — when considering the overall financial picture.

💡 Be consistent between Section 2.2 and Section 3 A common source of questions is inconsistency between the business value declared in Section 2.2 and the income declared in Section 3. If your accounts show the business making significant profit but your declared income is low, expect to explain the difference. Courts are alert to business owners who minimise their apparent income through retained profits, director's loans, or personal expenses run through the business.

When is a forensic accountant needed?

For straightforward businesses with clear accounts and modest turnover, a credible valuation can often be provided with the help of your regular accountant. However, for more complex businesses — particularly those with significant goodwill, multiple entities, overseas interests, or disputed profits — the court may direct a joint single expert forensic accountant to value the business independently. The cost of this is shared between the parties and can run to several thousand pounds. However, it produces an agreed figure that removes the business valuation as a disputed issue in proceedings.

Completing Form E yourself?

The DivorceCompanion Form E Builder guides you through the business assets section and all 28 sections in plain English, with a document checklist for every section.

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General information only. This guide provides general information about Form E in England and Wales. It is not legal advice. DivorceCompanion is not a law firm. For advice specific to your situation, consult a qualified family law solicitor at solicitors.lawsociety.org.uk.