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Complications when business owners divorce

If a Pennsylvania couple is getting a divorce and one or both own a business, the process could become more complicated and costly and might threaten the survival of the company. This is the case with a translation software business in Delaware where the founders were not married but were in a relationship. The two never created an agreement describing what would happen if the two split up and one wanted to leave the company. When the relationship did end, they could not agree on what to do with the company, so they went to court. A Delaware judge ruled that due to their deadlock, the company could be sold.

The state legislature has become involved in that case because the business could be sold to a private equity firm. This could hurt company employees. A similar case occurred in Louisiana where a woman owned an online diaper business that her husband got in the divorce. The woman had to buy it back.

This outcome is not inevitable. When two people start a business together, they should draw up agreements about what to do if the relationship ends. They should also be careful to ensure that they do not mix business and household expenses.

Dividing a business may lead to a particularly complex divorce if there is no prenuptial agreement or if no provisions were made at the formation of the business for handling such a situation. Even if spouses do not share ownership of the business, one spouse might be able to claim a portion of the business in the divorce. People might be able to negotiate a divorce settlement regarding the business with the help of their attorneys, but if they are unable to do so, they might have to go to court and have a judge settle the issue.

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Bruce Turner

In addition to his law degree, Bruce Turner has a master's degree in tax law and is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization.

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Attorney Bruce Turner is located in Dallas and represents people and businesses throughout DFW and the Metroplex, including Denton, Carrollton, Lewisville, Flower Mound, Farmers Branch, Irving, Las Colinas, Corinth, Highland Village, The Colony, Plano, Frisco, Allen, McKinney, Mesquite, Grand Prairie, Garland and Grapevine as well as Collin County, Denton County and Dallas County in Texas.

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