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3 options for dividing a business in a divorce

On Behalf of | Jul 30, 2021 | Divorce

When you and your spouse divorce, you must divide the property that you own together between the two of you. However, what if you own a business together?

There are several different options available to you for dividing a business in a divorce. The American Bar Association describes each in detail, but here is a general overview.

1. Continue to own the business jointly

Your business relationship does not necessarily have to end when your marriage does. You can choose to divorce your spouse and continue to remain business partners with him or her. For this arrangement to work, you and your spouse must split amicably and be able to put aside your personal issues. Perhaps understandably, few divorcing couples choose this option.

2. Sell the business

One way to handle a business that you and your spouse co-own is to sell it to someone else. In this scenario, neither you nor your spouse remains involved in running the business anymore, and you can split the money from the sale between the two of you.

3. Buy out your spouse

Either you or your spouse can buy out the other. This way, one ex-spouse continues to own the business and the other gets to pocket the money from selling his or her interest in it. This is the option that most couples eventually agree to.

Before you can decide how to divide your business in the divorce, you must have both of your interests valued so you know how much the business is worth. You also need to establish fairly early on in the process whether the business is marital or separate property. In the latter case, there is no need to divide it at all.


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