Photo of Professionals at The Law Offices of Campana, Hoffa & Morrone, P.C.

The Experience You Need.
The Results You Want.

Photo of Professionals at The Law Offices of Campana, Hoffa & Morrone, P.C."
  1. Home
  2.  » 
  3. family law
  4.  » What might divorce mean for my small business?

What might divorce mean for my small business?

On Behalf of | Apr 1, 2022 | family law | 0 comments

Divorce can impact so more than just your relationship with your spouse. When you build a life together, the separation can disrupt nearly every element of it, including your financial security.

If one or both spouses own a small business, this disruption can be particularly significant. Here are some changes you might anticipate.

Possible financial repercussions

In Pennsylvania, equitable distribution of assets during a divorce is standard, and equitable division does not always mean splitting evenly both ways. Even if the small business belongs to one spouse, the other spouse may have a valid claim. In a contested divorce, the court makes a final decision regarding what is or is not considered marital property.

Disbanding the company

Under more unusual circumstances, divorce may result in the dissolution of the business. Possible scenarios where this could happen include:

  • Spouses are equal partners, but one does not have the cash on hand to buy out the other.
  • Spouses amicably decide to dissolve the business.
  • A series of negative events, such as unmanageable disruptions to daily operations, leads to an inevitable dissolution of the business.

Marriages with a prenuptial agreement sometimes address how to handle issues before disbanding the company.

Adjusting daily operations

If one spouse plays an active role in the daily operations of the business but decides to quit in response to the divorce, the remaining spouse and employees face the repercussions. Everyone must cover the excess work until a more permanent solution comes along.

Even in a contested divorce, most couples can come to an agreement before taking any extreme measures that may disrupt business as usual.