Owning and running your own business, whether you operate a local retail store or have a private practice, like a medical office, likely takes up a lot of your time. Building a business also requires substantial investments.

From equipment and merchandise to a space for your business and insurance, you have probably invested thousands in the company over the years. If you and your spouse are on the cusp of divorcing, you may find yourself worrying about your business.

Especially if your spouse has indicated they expect to get a portion of the business, you may feel nervous and hope to protect the company you’ve built from claims made by your spouse. Will you have to share your ownership interest with your ex in a divorce in Pennsylvania?

Various circumstances influence ownership in a business

If you have spent your own time and money in the creation and maintenance of a business, you probably don’t feel like your spouse has much of a claim to the company at all. However, the name on the company’s paperwork will be less important to the courts than when you started the business, what assets you use to fund it and what, if any, contribution your spouse made.

For example, a person who already has an established business in their name at the time of marriage may be able to claim the business as separate property that is not subject to division. The same is true of anyone who has their spouse execute a prenuptial or postnuptial contract earmarking the ownership of the business and separate property.

However, if you started the business during your marriage, if you used income or assets that would be marital property in the eyes of the courts, or if your spouse made financial contributions or performed unpaid labor for the company, all of those factors may influence whether the courts see it as separate or marital property subject to division.

How did the courts split a business?

A company isn’t like a bank account that the court can just divide into two equal balances. Businesses have many moving parts, including staff, daily operations and expenses. The courts can and do sometimes decide to split the ownership interest in a business between spouses.

Other times, they may look at the valuation for the business and allocate other assets of similar value to the spouse who won’t retain the company. In some cases, the courts may order the spouse who retains the business to engage in profit-sharing with their ex or to pay them spousal maintenance in consideration of the value of the company.