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How to handle your business during a divorce

On Behalf of | May 20, 2022 | blog, Divorce |

Owning a business makes divorce much more difficult. Texas is a community property state. According to Texas Family Code Sec. 7.002. the courts divide any property acquired during the marriage in a manner they deem fair and just. If you started your business during the marriage, this falls under community property.

Fortunately, there are ways to simplify the process and give both parties an acceptable outcome. The most critical part of dividing a business during divorce is the valuation.

Sole ownership

If you want to obtain sole ownership of the business, you likely must purchase your spouse’s shares. Your spouse may be open to selling their interest. First, you need to determine the business’ worth. A valuator determines the fair market value by considering historical data and future revenue potential.


Another less common option is co-ownership after the divorce. This is usually only possible if the divorce is amicable and uncontested. Do not pursue this option unless your relationship remains cordial. Even if you both want to continue working at the company, a hostile environment is a situation no one wants to deal with, including your employees. It might be in your best interest to sell the business entirely and distribute the profits equally. However, just because you want to put the company up for sale does not mean you will find a buyer willing to pay your price.

Deciding what to do with your business is hard enough before a divorce. If you plan on ending your marriage, consider evaluating your company ahead of time to speed up the process.