Will divorce mean selling my business?

On Behalf of | Jul 30, 2022 | Property Division |

You have spent years building your business. As a business owner, you have seen highs and lows and spend countless hours trying to develop your next step as a company.

Going through a divorce can be a challenge for you and your business. Depending on your situation, divorce can lead to a variety of outcomes for your company.

Here’s what you should know about the impact your divorce could have on your business.

Yours vs. Ours

Similar to other assets in a California divorce, there will be a question of whether you own the business or if you and your spouse owned it together. In addition to the paperwork for the company, courts may also look at factors such as:

  • Who made the initial investment?
  • Who managed the business?
  • Where did the money for additions to the company come from?
  • When did you start the business?
  • How involved was each spouse in running the business?

Questions like these help the court decide who owns the business. Sometimes, the paperwork may state that you own the company, but factors like these can tell a different story.

Community property

Deciding actual ownership of the business is essential since California divorces follow the community property rule. Typically, anything you and your spouse acquired during your marriage belongs to both of you, with some exceptions.

If your business does not fall into one of the exceptions to make it your separate property, you could be in a situation where you need to look at options for handling your business.

While selling and splitting any remaining profit is one option, you may be able to find an alternative, such as buying your spouse’s share of the business.

Often, these situations can become quite complex. You should talk to a skilled professional about what will happen with your business and other assets.


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