How Does a Divorce Effect a Business?

When filing for divorce, spouses often focus on alleviating the physical and mental strain of a failing marriage. Financial issues arise when divorcing in South Carolina, and spouses who don’t address fiscal matters could find the dissolution even more stressful and negatively impacting. Spouses might co-own a business, which may complicate divorce proceedings and settlements. Effectively addressing the situation with the business should be a priority among divorcing couples.

Businesses and divorce proceedings

If the two parties cannot agree on how to divide the business or its proceeds, the court rules on the matter. South Carolina is not a community property state, so a 50/50 split might not occur. However, even in an equitable distribution state such as South Carolina, the court could order a 50/50 split. Alternatively, the court may decide one spouse deserves a fairer share of the business.

Maybe the two spouses who are going through the divorce may wish to arrive at a settlement agreement that allows them to decide what is reasonable. Taking part in lengthy court proceedings could cost significant time and money, and both parties might be disappointed with the court’s ruling.

Avoiding troubles during the divorce process

Businesses tend to suffer when those running the companies do not direct the entirety of their attention. A stressful, bitter divorce could lead to the company suffering. Some may find it wiser to sell the business, while others could hand operations over to a third party until the divorce ends. Ultimately, each spouse’s divorce and business consideration are different.

The spouses may rely on the business for income and financial support. Allowing the business to suffer would have negative consequences best avoided. Both spouses may need to keep such things in mind when separating and seeking a divorce.