There can be a lot of arguments, stress and uncertainty in a divorce. When there is a business involved too, that anxiety might seem uncontrollable.

A divorce is never easy, and there are usually complicated issues to resolve. If you own a business jointly with your former partner, there can be more issues to address. One of the most important is trying to make sure the end of your relationship does not end your business too.

Texas is a community property state. Property acquired during a marriage (including a business) is community property. The best way to relieve stress and arguments is to understand the process.

Is the business community or separate property?

The deciding factor is when the business started and by whom. Did you or your former partner start the business before the marriage? If your business started during the marriage, it is community property.

You must determine the value and percentage of ownership. There are options if the business is community property, including:

  • Buy out. One spouse pays the other for their interest in the business. You must determine the value of the business, and each spouse’s financial interest.
  • Co-ownership. This could include continuing to run the business’s day-to-day operations together. Spouses can agree to one of them running the business and the other receiving a percentage of the proceeds.
  • Selling the business. This is often the most agreeable way to distribute the business.

Reasonable property division is the goal

Business ownership can complicate a divorce. The court does not want to destroy your business. It wants to ensure the equitable division of the business. When the company started, who started it and the value of the business are important issues.