How can the business be saved when it seems like the “family boat” has sunk and the assets are ready to be split? Is there any legal difference in business division depending on whether it is a divorce via court or online divorce in Kentucky? How much can this unpleasant procedure be made less painful, and what should you definitely not do? These are the questions for divorce lawyer any entrepreneur wants to know the answer to. 

It’s not unusual for divisions in a company to cause trouble within the company and hurt the organization’s reputation. If one of the spouses is very involved in the business, the divorce and the division of property can hurt not only the business but also the interests of the other founders, workers, and contractors. This is especially true when one of the spouses owns a business. You can, however, take a number of steps that will make the risk less serious. The most common types of agreements are the contract for the marriage and the agreement to divide the property. 

Any property that either partner gets during the marriage is considered the property of the marriage and belongs to both partners equally, unless the marriage contract says otherwise and makes an exception for this rule. When it comes to how property is shared, the laws that apply depend on how an organization’s legal structure is set up. Let’s take our time with each one and look at how to protect your business in a divorce carefully.


  1. Individual Entrepreneurs

People who start their own businesses are in the best possible position to succeed since their company and any properties associated with it are held jointly by both partners in the enterprise. It is possible to split it up with them, just like the rest of their property.

2. Joint-Stock Company

It is not difficult to settle disputes over a stockholder’s property rights in a business. When a couple divorces, the assets that they accumulated throughout their marriage are normally split down the middle.

3. Unitary Enterprise

Each partner in a unitary firm holds an equal share of the legal ownership to the assets of the enterprise; yet, the business itself is responsible for making all of the necessary financial choices. The law provides the following types of property division in a divorce with a business involved for unitary businesses since it is not presumable that all of the participants of a unitary firm would have equal rights to the property:

  • Reorganization of a company by means of a split (allocation) or transformation into a commercial partnership or corporation or into a production cooperative, in either of which the exes will have equal rights when the reorganisation is complete.
  • The earnings from the sale of a business or property held in joint ownership by a married couple are divided equally between them in the event that the buyer is not a member of the joint ownership group.
  • Property owned by a unitary organization can be transferred from one spouse to the other in exchange for a payment to the other spouse equivalent to one-half of the value of the company’s net assets, as determined by the balance sheet.

In the first two possible outcomes, both spouses are on board with the breakup. Third, what happens if efforts to address the issue on an international level are unsuccessful and the subject is ultimately brought before a court?

4. LLC and ALC 

The spouse of a firm participant in an LLC or ALC might seek acknowledgment in court of his claim to a portion of his spouse’s participation in the authorized capital of the company as part of a property settlement (her). 

After then, the ex-spouse can either join the organization as a member or ask to be compensated in cash or property for his or her portion of the permitted capital. 

The split of shares in a joint-stock corporation, as you can see, is the “least painful” aspect of a divorce. The fact that the couple will have to divide the business’s profits and that one partner can keep their stock only if they can reach a fair settlement with their ex-spouse will have no impact on the company’s day-to-day operations.

The formation of a limited liability company (LLC) or an amicable limited company (ALC) is another viable option; in the event of a property division, the spouse (or spouses) of the business owner will not be eligible to become members of the company if the other participants object, but he will be entitled to monetary compensation based on the value of the net assets attributable to his share of the business. 


Examining the missteps that were made by entrepreneurs who sought to prevent or lessen compensation payments to the former half of the company after the split is a good way to protect your finances during a divorce.

1. The construction of a new business prior to the partition of property and its registration to close relatives or friends who are not linked to the former spouse is the clear frontrunner in the anti-rating category (s). 

These procedures won’t be too taxing if your office consists of little more than a desk, a chair, and a computer. However, if you have spent years building a solid name in the industry, it may be difficult to convey the significance of the upcoming changes to your business’s partners and contractors.

2. The second typical error is to try to disinterest the division by decreasing the company’s assets. By selling off assets for pennies on the dollar, business owners may hasten the company’s descent towards bankruptcy and their own showdown with the IRS. For them, this might be a deliberate attempt to avoid or pay less in taxes. Changes to the tax base and the total tax bill are the end result of business deals that don’t make financial sense. 

Moreover, such transactions may be deemed illegal by the court at the request of the former spouse, which would have a negative impact on the business of both the spouses and the company of any faithful purchaser who had consented to “grey” payment methods.

3. Corporate acts performed by owners are less prevalent, but can nevertheless be completely irrational. Events like this include mergers, acquisitions, reorganizations, and the entrance of new majority shareholders into the company’s existing shareholders. Their repercussions are risky and, in many respects, analogous to those of the first instance.


Finally, I’d like to bring your attention to the conclusion of a prenuptial agreement, the most dependable approach to save a business in the case of a divorce. If the future of the business is settled before the marriage is dissolved, then any turbulence inside the social unit will not have any impact on the company. 

Sadly, most people are of the opinion that a prenuptial agreement indicates distrust between the couple. However it is a way the wealthy untie the knot with their ex-spouses. But the statute specifies that one of his conclusion’s aims is merely to promote a more widespread appreciation for marriage and family life. For example, defining each partner’s rights and responsibilities during and after marriage.

Our main advice on dividing a business in a divorce would be:

  • It is important to carefully consider the best business structure before forming a company with your spouse. 
  • Do not grow the allowed capital and property of the business at the expense of common joint finances if the business was founded before the marriage and you do not expect to include your other half in the business. 
  • In an effort to prevent division or limit compensation owed to the other spouse, you might end up destroying your business. 
  • Make sure that there are no unpleasant surprises in the case of a divorce by signing a prenuptial agreement.