Dividing a Business

Can a spouse claim property rights over a business in divorce?

When it comes to getting a divorce, business owners may have a few extra things to worry about. Business that began or grew during the marriage can sometimes be considered marital property that needs to be divided during the family law process. Understanding how Alberta property rights impact business ownership and management is important for both sides in an entrepreneurial divorce.

The paperwork that might sway family law decisions on business ownership in a divorce does not have to be a traditional prenuptial agreement. Buy-sell agreements built within the business can also have an impact on how valuation is determined. However, for any agreement to stand, it will need to be validated by the courts.

Losing a company as part of a divorce settlement is possible, depending how a business is set up or how profitable it is. In some cases, ownership of a business can be a pawn in the divorce settlement negotiations. For example, one person may keep a shared business while the other retains the family home. Every situation is different, although standards are in place to guide discussions.

The impact of a divorce on business operations can extend beyond ownership. Divorce can be emotionally trying and cause distractions for those involved, which could take focus off business-related interests. Uncertainty could also impact the staff’s feeling of security and turnover in the business. Working with a trusted Alberta lawyer can help to alleviate some of this stress and help individuals better understand their property rights as they seek a separation agreement.

Related Posts: Family law considerations when divorcing young, Does who initiates a divorce impact property rights in Alberta?, Spousal support among common divorce surprises, Managing finances during the family law process