Protecting Your Business During Divorce

When most people think of divorce, they think of splitting homes, bank accounts, and custody schedules. But for entrepreneurs and business owners, a divorce can raise an entirely different set of concerns—especially when your livelihood is at stake.

What Happens to a Business in Divorce?

In Alberta, matrimonial property is divided fairly between spouses unless a specific agreement states otherwise. If a business was created or grew significantly during the marriage, it may be subject to division—even if only one spouse was involved in running it. This can include the business itself, its assets, or even future profits.

Can You Keep Your Business?

Yes—but it may require negotiation. A business is often considered a high-value asset. To retain full ownership, one spouse may need to buy out the other’s share using other assets, such as property or savings. This is where having a solid valuation is crucial.

Why Business Valuation Matters

Before anything can be divided, a professional valuation will help determine the business’s current and potential worth. This process looks at financial statements, assets, liabilities, and future earnings. The more accurate the valuation, the stronger your legal footing in negotiations.

How to Safeguard Your Business

Here are a few ways to help protect your business from becoming a source of legal conflict:

• Prenuptial or Cohabitation Agreements – These agreements can clearly outline what will happen to the business in the event of separation or divorce.

• Shareholder Agreements – If you have business partners, these agreements can limit a spouse’s ability to gain control or access to the business.

• Maintain Clear Records – Keep business and personal finances separate. Mixing them can complicate the division process.

• Plan Ahead – If divorce is on the horizon, consider working with a family lawyer to understand your options and prepare your case.

Work With a Lawyer Who Understands Both Family and Business Law

Divorces involving businesses are complex. You’ll want a legal team that understands not just family law, but also the financial and legal nuances of business ownership. At Chahal Law, we offer trusted legal advice to help you protect your assets and make informed decisions.

Need guidance? Contact Chahal Law at (780) 461-0989 to schedule a consultation.