Protecting Family Business Assets During Divorce in South Carolina

Alexa Holloway | Nov 19 2025 17:00

Determining how much a business is worth is one of the most contested aspects of a divorce involving business ownership. Courts in South Carolina require an accurate business valuation before deciding how to divide marital property.

There are several methods of business valuation commonly used:

  1. Asset-Based Approach: Calculates the value of assets minus liabilities.

  2. Income Approach: Estimates future earnings and discounts them to present value.

  3. Market Approach: Compares the business to similar businesses recently sold.

At Holloway Law, our attorneys often work with forensic accountants and valuation experts to ensure an accurate picture of your company’s worth — especially when complex structures, such as partnerships or professional corporations, are involved.

Common Challenges in Dividing Business Assets

Divorces involving business ownership can raise complicated questions, including:

  • Was the business started before or after the marriage?

  • Did both spouses contribute to the business’s success?

  • Were marital funds used to grow or maintain the company?

  • Is the business interest separate or commingled with other marital assets?

Even if one spouse is not formally an owner, their indirect contributions — such as managing the household while the other ran the company — may influence how the court divides assets.

Legal Strategies to Protect Your Business

Protecting your family business in a South Carolina divorce requires foresight and legal precision. Consider the following strategies:

1. Maintain Clear Financial Records

Keep detailed documentation of all business transactions, separate accounts, and ownership interests. Proper records help establish whether the business is non-marital and clarify what portion of its value is subject to division.

2. Avoid Commingling Assets

Mixing personal and business finances makes it difficult to prove the company is separate property. Maintaining distinct accounts, payroll, and records helps preserve the business’s independent status.

3. Use Operating or Partnership Agreements

An operating agreement or buy-sell agreement can define what happens to ownership interests if one spouse divorces, leaves, or passes away. These agreements provide a level of protection and predictability that South Carolina courts will often respect.

4. Consider a Prenuptial or Postnuptial Agreement

While not retroactive, these agreements can be valuable tools for business owners planning ahead. They clarify ownership rights and can prevent disputes over business valuation or division later.

5. Explore Buyout Options

If a spouse is entitled to a share of the business, a buyout agreement may allow the owner-operator to retain full control by compensating the other spouse through other marital assets, such as real estate or retirement funds.

When Business Litigation and Family Law Overlap

Divorces involving closely held or family-run companies often extend beyond domestic relations. Disputes can arise between business partners, shareholders, or other family members during or after the divorce.

In these cases, business litigation experience becomes as important as family law expertise. Holloway Law’s combined approach helps address both sides — from corporate governance issues to asset division and contract enforcement — ensuring the business continues operating smoothly during a turbulent time.

The Role of the Court in Equitable Distribution

South Carolina follows the rule of equitable distribution, which means the court divides marital property in a way that is fair — not necessarily equal. Judges consider many factors, including:

  • Length of the marriage

  • Each spouse’s contribution to the marriage and business

  • Economic circumstances of each party

  • Non-marital property owned by either spouse

  • Marital misconduct or dissipation of assets

Having legal representation that understands both Greenville’s local family courts and business law is essential to presenting a clear, fact-based case.

Protecting the Future of Your Family Business

Divorce doesn’t have to mean the end of your family business. With proper legal guidance and careful planning, you can protect your company, maintain operations, and minimize disruption.

At Holloway Law in Greenville, SC, our attorneys combine deep experience in family law, business litigation, and asset protection to help business owners navigate complex divorces and safeguard their livelihoods.