Business Interests in Pennsylvania Divorce

Protecting Closely Held Companies in Equitable Distribution

---

When a closely held business is involved in divorce, classification and valuation determine control and liquidity outcomes. Ownership documents, compensation structure, and retained earnings influence equitable distribution analysis.

Valuation Considerations

• Income and capitalization approaches
• Asset based valuation
• Goodwill classification
• Minority and marketability discounts
• Adjustment of owner compensation

Operating Agreements and Transfer Restrictions

Transfer restrictions and mandatory buyout provisions may affect both valuation and mechanics of distribution. Divorce does not automatically override governing business documents.

See related discussion on
Buy Sell Agreements and
LLC Operating Agreements.

Frequently Asked Questions

Can a spouse force the sale of my business?

Not automatically. Courts seek to divide value equitably. Structured buyouts or asset offsets are common alternatives.

How is goodwill treated?

Pennsylvania distinguishes enterprise goodwill from personal goodwill. The classification affects valuation outcome.

Should business owners consider prenuptial agreements?

Advance planning can define classification and valuation methodology before disputes arise.