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What happens to your business in a Texas divorce?

On Behalf of | Jan 29, 2024 | Blog, Property Division

Divorce often introduces complexities when you own a business. Different factors come into play if the business has shared ownership or is in one spouse’s name. You might wonder if your spouse can force a sale.

Navigating business ownership during divorce demands informed decision-making.

Keeping the entire business

If one spouse wishes to retain the entire business, considerations involve negotiating a fair buyout amount for the other spouse’s share.

Remaining partners

Some divorcing couples may choose to remain business partners post-divorce. This collaborative approach requires a strong commitment to communication and shared decision-making. You should define clear agreements on responsibilities, profit distribution and potential buyout terms in the future.

Selling your portion to a third party

Selling one’s portion of the business can provide a clean break. This option involves determining a fair market value for the share and finding a buyer. You can divide the proceeds from the sale as part of the overall asset distribution in the divorce settlement.

Individually owned companies

Business may be separate property if established before the marriage, but aspects like increased value during the marriage could become subject to division.

During divorce, one spouse generally cannot unilaterally force the sale of a business owned by the other. The process involves negotiation and agreement between the spouses or a court order.

If the spouses cannot reach an agreement, the court may decide on the business’s fate, considering factors like ownership, valuation, and the potential impact on both parties. While a spouse may express a desire for a business sale, forcing it typically requires legal proceedings and the court’s determination based on the specific circumstances of the divorce case.

Navigating valuation challenges

Valuating a business accurately helps to ensure a fair distribution of assets, regardless of the post-divorce ownership option you choose. Seeking the expertise of business valuation professionals helps determine the business’s true worth, considering factors like revenue, assets and market conditions.

Legal considerations

Businesses in divorce cases must align with Texas community property laws. Understanding how these laws impact asset division is essential for divorcing couples. Property acquired during the marriage is generally considered community property and subject to equitable distribution.

Financial planning

Divorce can bring financial uncertainties. Both parties should engage in thorough financial planning, considering post-divorce budgeting, income streams and potential tax implications.


Couples facing business-related disputes during divorce may opt for mediation. This alternative dispute resolution method allows parties to work together with a neutral mediator to find mutually acceptable solutions, potentially avoiding contentious courtroom battles.

Understanding the potential scenarios and available options helps divorcing couples to plan for these challenging situations.


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