What To Do When Co-Founders Divorce


• Seek legal advice from an experienced divorce attorney to protect the rights and interests of the business. 

• Finalize all other aspects of the divorce before discussing what happens to the business. 

• Equitably divide assets such as shares, profits, intellectual property, and debts/liabilities among both partners. 

• Have an airtight partnership agreement before starting up the business. 

• Consider restructuring the company to maintain ownership for both partners. 


Starting a business with a partner is no small feat. It requires the trust and commitment of both parties to ensure success. But what happens when the relationship between co-founders sours? Unfortunately, dissolving a partnership is not always as simple as it sounds. In some cases, divorce can have serious implications for both parties and their business. Here’s what you need to know about protecting yourself and your company in the event of a split between co-founders.

Finalizing The Divorce

Depending on the divorce laws in your state, you may need to file for divorce with a court or sign a settlement agreement. It is crucial to seek legal advice from an experienced divorce attorney during this process, as they can help protect your rights and those of your business.

Before going over what happens to you and your ex’s business, it’s better to settle all the other aspects of your divorce first. This includes issues such as child support and alimony, as well as the division of assets or debt.

It’s important to discuss these matters with a lawyer in order to make sure you are getting what is fair in the end. This also ensures that any financial decisions you make down the line in regard to your business will not be affected by pending disputes.

couple talking to a male divorce lawyer in his office

Dividing Assets Equally

Once all other aspects of your divorce have been settled, it is time to decide how the assets of the business will be divided. When a couple divorces, assets are divided equitably among both parties. This is also true for co-founders who go through a dissolution of their partnership. It is vital to make sure that all assets are accounted for and that all decisions are made fairly between both partners. Depending on the structure of your business, here are the assets you could split:


Depending on the legal documents you have in place, this could be a simple process, or it could require more complex negotiations. It’s important to remember that the value of shares can change over time, so you may need to reevaluate their worth during the divorce process.


Profits are not always split evenly. If one partner has contributed more to the business than the other, they may be entitled to a more significant portion of the profits. Therefore, you should have an agreement in place that outlines how profits will be split in the event of a dissolution.

Intellectual Property

This is any property created through intellectual efforts, such as software, patents, or trademarks. You will need to decide if these pieces of intellectual property can be divided among both partners or if one partner should retain ownership.

Debts & Liabilities

If your business is not making a profit, then you will need to decide how to divide any debts and liabilities between partners. This is especially important for companies that are in the process of being liquidated, as it could mean significant losses for one partner.

man and woman discussing how to divide assets with housekeys and rings in the table

Restructuring The Company

Another option would be to restructure the company so that one partner has control over certain aspects while the other maintains control over others—creating two distinct entities within the same organization.

This would ensure that each party has an equitable stake in the business without having to completely dissolve it or create separate companies from scratch. However, it’s essential to keep in mind that restructuring can be complex and costly, depending on your particular situation.

It’s best to consult with legal counsel before making any changes to your current corporate structure. That way, you can be sure that all decisions are being made with the best interests of both parties in mind.

Whenever faced with difficult situations like a divorce between co-founders, having an airtight partnership agreement prior to starting up is critical for ensuring everyone involved gets fair treatment if things don’t work out as planned down the line. Additionally, keeping communication lines open throughout and restructuring the company if necessary can help minimize disruption and maximize efficiency during especially trying times like these ones. Ultimately, understanding what steps can be taken ahead of time will provide peace of mind knowing that both sides are protected regardless of how everything turns out in the end.

The Author


Scroll to Top