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How Businesses Are Divided During a Divorce


Property division is often one of the most hotly contested processes during any divorce, and the likelihood of disagreements between divorcees only increases when a valuable asset, such as a business, is on the line.

Today, we're exploring how businesses are handled during the property division process, so you know what to expect from your own divorce as you move forward.

How Do Courts Handle Businesses During Property Division?

If you or your spouse owns a business (or you own a business together), the first order of business in your property division case will be determining exactly how much that business is worth. This process called "asset valuation" helps the parties and the court work towards an equitable outcome during property division.

Typically, both parties work with their lawyers and a third-party financial professional specializing in asset valuation to determine how much the business is worth. If each party determines the business is worth a different amount, they typically work together to compromise, or the court will establish a value for the business through litigation.

Once the business's value is established, the parties can either choose to work together and distribute the business out of court or litigate the property division in the courtroom.

If the parties want to handle the distribution out of court, they must work together to reach a compromise and then sign an agreement stating the terms of the property division. If the parties litigate the process in court, each presents their case to a judge (or is represented by their lawyer), who then makes a decision the court deems equitable on behalf of the parties.

There are a few common outcomes in business property division cases:

  • One party buys out the other. If one party owns a majority of the business, they may be able to buy their soon-to-be-ex out of the business to continue operating it themself.
  • The parties continue as co-owners. In situations where parties are amicable with one another, they can continue to operate the business as co-owners.
  • The parties split the business. If each party wants to continue owning the business, they can split it and assign a new brand and name to each business.
  • The parties sell the business. If the parties can't reach a resolution that allows the business to continue being owned by one or both of them, they can sell the business.
  • The parties dissolve the business. Under certain circumstances, the parties can choose to dissolve the business entirely.

During property division, whether the revenue from a business counts as separate or marital property is sometimes a point of contention. Often, courts do distribute the revenue from a business among parties equitably, considering income earned from the business during the marriage as marital property.

At Arnold Law Group, APC, we'll work with you to help you achieve an equitable outcome in your property division case.

To schedule a consultation with our team, contact us online or via phone at (559) 900-1263.

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