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Mastanduno Law Group June 18, 2020

You’re Getting Divorced—what Happens to Your Business?

Property division can be one of the most stressful aspects of a divorce, and most couples wonder what assets they will have at the end of their marriage. For business owners, those questions may extend to the businesses that they have dedicated their money and effort to. What happens to your business during property division?

Is Your Business Considered Marital Property?

Oregon is an equitable distribution state, meaning that the court will work to create a fair division of marital property. This means that the fate of your business may depend on whether it is considered marital property.

If you and your spouse founded your business together, it will almost certainly be considered jointly-owned in your divorce. The court may also consider your business a part of your marital property if it was founded during the course of your marriage, if you used marital funds to support your company or if your spouse contributed to its success.

What Are Your Options if Your Business Is Marital Property?

As the American Bar Association notes, you generally have three different options when the court considers your business marital property. You can continue owning and operating your business together, one of you can buy out the other’s share of the business or you can sell the business and divide the proceeds along with your other assets.

Continuing your business partnership as co-owners can be a challenge for many couples, and this option generally requires you to set aside your feelings about the divorce and put your business’s success first. However challenging it may be, this may be a fair solution for couples that started their business together and want to continue their company’s success.

If only one of you has a dedicated interest in the business, you may be able to buy out your spouse’s share in the company and move forward as sole owner. This can involve buying their share outright. It may also involve sacrificing your family home or another valuable asset during property division to offset the value of your business.

If you are unable to continue your business partnership or do not have the funds to buy out your spouse, you may need to sell your business. This can be a time-consuming process, and it requires you and your spouse to address what price would be acceptable and how you want to run your business before the sale is finalized.

While determining the fate of your business can be emotionally and financially challenging, it is possible to find a solution in your divorce that protects your interests and your company’s future.


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