In a Texas divorce, there are several issues that are unique to considering a business as an asset in the property division. The normal property division issues of identification, characterization, valuation, and division each have intricacies for businesses that need to be considered.

Addressing the type of entity (corporation, partnership, sole proprietorship) is important because the rules for a Texas divorce differ depending on the type of entity.

Determining the date of formation of the business entity may be crucial to the characterization as either separate property or community property.

Any changes in the formation of the entity during the marriage could change the characterization and are an important factor to note.

And, vital to any business operating during a divorce is the question of how to continue to operate the business without suffering a devaluation of the interest while the divorce proceeds. The day-to-day operation issues and protecting the business’ ability to make profit flow through to the value that the business has to the marital estate and the parties individually.

Lastly, evaluation of where the customers come from, which is an essential component of determining the business’ commercial goodwill as a factor of value of the entity versus the owner’s personal goodwill which is not a marital asset, will be important.

Here is a video of a talk that I gave on The Business Owner’s Divorce — which is approved for 1.0 hours of Texas CLE Credit, Course # 174151052: The Business Owner’s Divorce

Here is the powerpoint paper referenced in my talk:

Small Business Issues in a Texas Divorce

Here are two other white papers that could be useful for representing a spouse in a Texas divorce when a business is at issue:

10 Documents to gather for business in divorce

Top Five Concerns Regarding Small Business Ownership and Divorce in Texas