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Dividing a Business During a Divorce: What You Need to Know

When a couple decides to get divorced, it can be emotional for both parties. It is especially true when dividing up shared wealth and assets. In most cases, each spouse will want to ensure they get their fair share of the properties during the marriage. Unfortunately, one of those things could be a business.

Whether someone owns the venture more than the other or a family business, it remains a shared asset. The complications will intensify if the company starts after tying the knot. It is a significant income driver for families, so it is not surprising if both sides refuse to back out of the situation.

Unfortunately, it could lead to a disastrous and dragging event that will either ruin the already-tense relationship of the separating partners or the financial stability of both sides. However, there remains a need to finish the proceedings to prevent further tension.

Here is what you need to know about dividing a business during a divorce.

What Determines How a Business Gets Divided?

A big part of the property division process is figuring out who owns what. The court will look at how much each person contributed to the business. It also determines if one spouse will get more than the other based on their role in the company.

For example, let’s say that one spouse ran the day-to-day operations while the other handled the finances. The court may favor that the person running the company gets a more significant portion of the business for doing the most work. However, if both parties equally contributed to its success, they would likely split it.

If you started the business before the marriage, you must take protective steps for it.

It would help if you also kept in mind the state you live in, as it will significantly impact how the business gets divided. Some states are community property states, while others are equitable distribution states. The court will follow the state’s rules to determine who gets what.

What Happens if the Business Started After the Marriage?

A divorced couple dividing business assets

The court will still follow the state’s rules on dividing a business during a divorce. However, it could get complicated if the company started after the marriage. It would be challenging to figure out how much each spouse contributed to its success.

For example, let’s say that one spouse quit their job to help grow the business full-time while the other continued working. In this case, the court may find that the person who left their job did more to contribute to its success and give them a more significant portion of the company.

It is essential to keep in mind that the court will also look at the financial situation of each spouse. For example, if one spouse has a more significant income than the other, the court may find they can afford to live without a portion of the business.

What Happens to Child Support?

If you are the primary breadwinner for your family, you may be concerned about how child support will impact your business. The good news is that child support is tax-deductible for the paying spouse. However, it is essential to keep in mind that child support payments can fluctuate based on changes in income.

For example, let’s say you own a successful company and make a significant income. Your ex-spouse may request more child support because of your increased earnings. It is essential to stay up-to-date on your income and ensure that you are accurate when filing your taxes to avoid complications. You might have to get a child support attorney involved if your ex-spouse refuses to be transparent with the company’s income.

What Happens if There is More Than One Owner?

If there are more than two business owners, it could get complicated. The court will need to determine how much each person owns and contributes to its success. It would help if you had documentation proving your ownership stake and what you did to contribute to its growth.

The court may also need to consider the financial situation of each owner. For example, if one owner has a more significant income than the others, they may be able to afford to buy out the other owners.

It could be challenging to stake your claim when you share your business with a spouse and a friend. The decision might not be in your favor, but you can still find ways to ensure you get your fair share. Your business and divorce lawyers need to interact to make that happen.


There are many questions arising from dividing a business during a divorce. The most important thing you can seek professional legal help to ensure the process goes as smoothly as possible. All your questions require answering, and you must do your best to attain them before going to court.

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