Legal and financial impact of divorce on business

Divorce can negatively affect not only personal life but also the smooth continuity of a business. By assessing potential risks in advance, it’s important to identify appropriate legal tools to manage future uncertainty. A proactive approach allows business owners to ensure their companies remain resilient and protected from personal disputes.

While shareholder rights in a company are formally exercised by the spouse registered as the shareholder, any transfer, sale, or pledge of shares generally requires the consent of both spouses or must be based on a clear legal agreement, such as a prenuptial or postnuptial contract.

For entrepreneurs and business owners, it is crucial—whether entering into marriage or already married—to have open discussions with their partner about asset management and ownership. Defining which assets will be treated as joint and which as separate can help prevent future conflicts. This may involve real estate, business ownership, or investments. Such transparency fosters smoother asset governance and division, and provides both spouses with peace of mind regarding their financial future.

Failure to resolve ownership of shares in time can create a real risk that, during a divorce, one spouse will not only claim compensation but also seek rights to half of the jointly held shares.

This risk is particularly serious when the spouse involved in running the business plays a key role in the company’s operations or decision-making. Unclear ownership or legal disputes can lead to prolonged conflicts and litigation, costing both time and money, and ultimately threatening business continuity.

To avoid this, it is essential to clearly define what is considered joint and what is individual property, including business shares. These issues can be settled during the marriage through a notarized asset division agreement or a prenuptial/postnuptial contract. Such agreements should specify who owns which shares, how jointly held shares will be divided in the event of a divorce, and whether compensation will apply.

It is also important that these agreements be drafted carefully and fairly, taking into account both spouses’ interests and possible future scenarios. With the help of professional legal counsel, such agreements can be tailored to meet legal requirements and ensure protection for both parties—ultimately safeguarding the stability and continuity of the business, even during difficult personal circumstances.