Business & Divorce
How Divorce Can Affect Your Business

How Divorce Can Affect Your Business

September 10, 2021

Divorce can be challenging for any couple, no matter their circumstances. It can be particularly difficult if you own a business. Divorce can affect a company’s ownership and leadership structure, business assets, and even day-to-day operations. It is important to understand how and why divorce affects businesses so you can anticipate and address these—minimizing any negative impact on you and your company.

Daily Operations

As a marriage nears its end, it will take a lot of your time and attention. Trying to focus on running a business while dealing with the stress and uncertainty of a divorce can be too much for some people to handle. Meetings with attorneys and gathering financial and legal documents can take up a lot of time. If divorcing spouses run the company together, they may start to disagree on key issues and may have trouble working alongside one another. All of this can affect the day-to-day operations of a business, stunting growth and even causing decreased income and production.

The best way to prevent your divorce from affecting the daily operations of your business is to try to separate the two as much as possible. Even from a mental standpoint, focusing solely on work while you’re at work can help you stay on top of things. Utilize lists, planners, and calendars to track key tasks and reminders. Assign some of your duties to your employees, if possible, to free up your time for divorce-related matters. Enlist professional help from your accountant and attorney to make sure you are looking at your divorce from every angle—including how it may affect your company. Delegating and keeping tasks organized can go a long way in protecting your company’s day-to-day operations.

Business Assets & Ownership

In California, any assets and property acquired during a marriage are considered marital property and are subject to equitable distribution. This may include your business if you established it during your marriage, you invested marital assets, or your spouse contributed to its growth. Your interest in the company may be subject to division in your divorce. You will need to figure out how to distribute this to your spouse and will need to consider how this might affect your stake in the company, stock value, and more.

A candid discussion with your attorney is an ideal place to start when it comes to business assets and ownership in a divorce. Outline your goals regarding the company and your stake in it and compare these to your spouse’s objectives. Take an in-depth look at how different scenarios and approaches might affect your business and your personal finances. Using all the data at hand, you and your attorney can work out a strategy that helps you achieve your goals.

Depending on the circumstances and your goals, you could:

  • Own and run the business together with your spouse.
  • Buy out your spouse’s share in the company, becoming sole owner.
  • Sell the business and split the profit with your spouse.
  • Dissolve the business, which is usually the worst-case scenario.

What You Can Do & How a SoCal Divorce Lawyer Can Help

Every divorce is different, just like every business. There is no one-size-fits-all solution that will protect your company. There is no cookie-cutter strategy that will prevent your spouse from getting part of your assets. It will take experience, time, and determination to find the ideal approach for your unique situation. At the Edgar & Dow, we work closely with our clients to identify their short- and long-term goals and then develop plans of action that help us achieve them, one step at a time.

For additional information, see our blog: What to Do with Your Family Business After a Divorce.

Our Southern California divorce attorneys are standing by to offer honest insight based on a history in family law counsel that extends back to 2004. Call (888) 251-9618 to find out how we can assist you.


The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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