Divorce can be complicated under the best of circumstances, but the situation becomes even more sensitive when one or both spouses own a business. If you own a limited liability company (LLC), it’s essential to understand how to protect that business interest during divorce proceedings. Personal and professional lives often overlap, and failing to maintain clear boundaries between them can put your business at risk. Knowing how to preserve your LLC may help you safeguard what you’ve worked hard to build.
Whether your LLC is considered marital property depends on how and when it was formed. If you created the business before your marriage and kept its finances and operations separate from your marital life, it may be considered separate property. However, if the business was started or significantly expanded during the marriage—or if marital funds or joint efforts were used to support it—the LLC may be viewed as a marital asset.
Arkansas follows the principle of equitable distribution, which means the court divides marital property fairly, though not necessarily equally. The court may evaluate each spouse’s contribution—financial or otherwise—to determine how the LLC should be handled in the property division process.
There are steps you can take in advance—or even during the divorce process—to reduce the risk of your LLC becoming subject to division.
If the court determines that your spouse has a claim to part of your LLC, the outcome could vary depending on the circumstances. You might be required to buy out their share using personal assets or financing options. In some cases, a spouse may be granted a non-controlling interest, meaning they are entitled to a portion of the profits but cannot make business decisions.
Regardless of the result, it’s important to have legal and financial professionals involved to ensure the resolution is fair and sustainable for you and your business.
A knowledgeable divorce lawyer can be instrumental in helping you protect your LLC during a divorce. The attorneys at Wilmoth Law Firm can assist with:
Divorces involving business ownership require both legal precision and strategic planning. At Wilmoth Law Firm, we understand the stakes involved when a business is on the line. Our Fayetteville divorce lawyers are ready to guide you through the legal process with your financial and professional future in mind. Call 479-443-8080 or contact us online for a free consultation. Located in Fayetteville, Arkansas, we serve clients in the surrounding areas.