Austin, TX family law attorney Tyler Pennington explains how closely held businesses are handled in a divorce. He notes that when married couples own a business together, that business often becomes one of the most significant assets in their divorce. Determining who will continue running the business and whether the spouses can manage a professional relationship despite their divorce is a critical part of the process.

He often handles these matters at the temporary orders hearing stage, addressing questions such as who will operate the business while the case is pending and what level of transparency the other spouse will have into its operations. Ultimately, the key issue is the business’s value. Since most divorcing couples cannot continue running a business together, it’s necessary to evaluate each individual’s contributions and history with the business to determine a fair and equitable buyout of one spouse’s interest and plan for how the business will operate post-divorce.

He emphasizes that handling these cases requires not only expertise in family law and the clients’ personal business history but also a strong understanding of the business organization code. Many closely held family businesses have operating agreements or contracts between spouses, and navigating how the family code and business organization code intersect is essential for dividing the business and managing it effectively after divorce.