How To Settle A Divorce When You Both Own A Company

July 13, 2023

How To Settle A Divorce When You Both Own A Company

Going through a divorce is often a complex and emotionally charged experience. Factors such as child custody, property division, and financial settlements can complicate matters further. When both spouses own a company together, the process can become even more intricate and require careful consideration. In this blog post, we will explore some essential steps and considerations when settling a divorce with shared business ownership.

1. Consult with Experienced Legal Professionals

One of the most critical steps in settling a divorce when both parties own a company is to seek professional legal advice. A family law attorney experienced in business ownership and divorce settlements can provide valuable guidance throughout the process. They can help you navigate the complexities of property division, understand your rights and obligations, and advocate for your best interests.

2. Evaluate the Company’s Value

Determining the value of the business is essential when dividing property and ensuring a fair settlement. Engaging a qualified business appraiser or a forensic accountant can help determine the company’s worth. They will evaluate factors such as assets, debts, cash flow, and market analysis to arrive at an accurate valuation. Having a clear understanding of the company’s value will facilitate fair negotiations and help structure an equitable settlement.

3. Consider Buyouts or Co-Ownership

When both spouses own a company, various options for its future must be explored. One possibility is a buyout – one spouse purchasing the other’s shares and assuming sole ownership. This agreement often involves determining a fair purchase price, considering factors such as the business’s value, future profitability, and financial ability of each party.

Alternatively, co-ownership may be a viable solution if divorcing spouses can manage to maintain a working relationship. This option might involve drafting a detailed agreement outlining responsibilities, decision-making processes, and ways to handle potential disputes in the future. Co-ownership requires open communication, mutual respect, and a commitment to the business’s success despite personal differences.

4. Address Management and Decision-Making Roles

If both spouses hold key management positions within the company, it is crucial to determine how these roles will be reassigned or shared moving forward. Making these decisions early on helps clarify the business’s structure and streamline operations after the divorce is finalized. Consider factors like expertise, experience, and potential disruptions in daily operations when allocating management responsibilities.

5. Divide Other Business Assets and Liabilities

Dividing the company’s assets and liabilities is an integral part of settling a divorce when shared business ownership is involved. Tangible assets, such as equipment and property, may need to be divided or assigned to one spouse, considering their contribution to the business’s success. On the other hand, debts and loans must also be addressed fairly, ensuring that both parties are responsible for any liabilities incurred during the marriage.

6. Review and Adjust Operating Agreements

If the company has an existing operating agreement, it might need to be revised or amended to reflect the changes resulting from the divorce. This essential step ensures that new ownership arrangements, decision-making processes, or management roles are formalized and legally binding. Working closely with an attorney to review and modify the operating agreement will help protect both parties’ rights and outline expectations moving forward.

7. Address Tax Implications

Divorce often has significant tax implications, especially when it comes to shared business ownership. It is essential to consult with a tax professional to understand the potential tax consequences before finalizing any settlement agreements. Considerations may include capital gains taxes, payment structures, and potential deductions. Proper tax planning will help mitigate any unforeseen financial burdens and ensure a smooth transition.


Divorcing when both spouses own a company can be a complex and challenging process. Seeking professional legal advice and guidance is crucial to navigate the intricacies of business ownership and divorce settlements successfully. By evaluating the company’s value, considering buyouts or co-ownership, and addressing management roles, assets, and liabilities, you can create a foundation for an equitable settlement. Remember to review and adjust operating agreements appropriately and consult with tax professionals to address any potential tax implications. With careful planning and consideration, you can settle your divorce while protecting both your personal and professional interests.

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