Your company, his half?

What is included in the community property of spouses?

Business profits generated by your company during the marriage are part of the community property of spouses (SJM). This applies even if the company is registered in the name of only one spouse. From a legal perspective, what matters is that the profits were generated during the marriage—a time when assets are acquired jointly.

The same applies to real estate and other company assets. If they were purchased with money from a joint account or from company revenue, they are also part of the SJM. This includes, for example, offices, cars, or manufacturing equipment.

Finally, company shares—did you establish a limited liability company (s.r.o.) or join a company during your marriage? Even if you are listed as the sole owner, the share usually falls into the community property. This can be a very sensitive topic during a divorce.

When is a company not part of the SJM?

However, there are exceptions that can protect your business. If you know what to look for and how to properly document it, you can save key assets for your future business activities. A typical exception is property you owned before entering into the marriage. A company founded before the wedding remains your separate property. But beware of the profits it generated after the wedding—those do fall into the SJM.

Another exception is gifts and inheritances. Did you inherit a property that the company now uses as an office? If the gift or inheritance was not mixed with joint funds, it should not be subject to division. However, it is essential to have everything thoroughly documented.

An interesting point is also so-called property for personal use. For example, if you own a valuable art collection or tools that are not used for business, they may be recognized as separate property. But be careful—the interpretation of the law is not always clear.

How to protect your company during a divorce?

The biggest mistake is to hope that "it will somehow work out." It is much better to have a plan and know in advance how to protect your business.

If you founded the company during your marriage, it falls into the SJM. The exception is if you have a prenuptial or postnuptial agreement that excludes the business from the SJM regime. Such an agreement can be a strong legal shield in times of crisis. Read how to conclude one here: https://www.arws.cz/novinky-v-arrows/manzelstvi-bez-financnich-nejistot-proc-a-jak-uzavrit-predmanzelskou-smlouvu

A different scenario arises if the company was financed from sources that were separate property (for example, from an inheritance). In such a case, it must be possible to clearly prove that the funds came from these sources—ideally through accounting records, statements, and other evidence.

Example:
Imagine you founded the company yourself before your wedding, but during the marriage, you expanded it using joint savings. In a divorce, the other spouse can then claim a portion of this increased value. If you did not have a clear agreement or separate financing, calculating the share can be complicated—and often leads to unnecessary disputes. Read about the claims your spouse may have here: https://www.arws.cz/novinky-v-arrows/podnikate-a-rozvadite-se.

What can you do today?

First, get a clear picture of your property situation. Do you know what belongs only to you and what is joint property? If you are not sure, a lawyer with experience in property settlement can help you.

Proper documentation is also important. Maintaining separate accounts, keeping evidence of the funds you used to finance the company, and having orderly accounting records—all of this can have a significant impact on the outcome of the divorce proceedings. And finally, consider the possibility of narrowing or separating the SJM.

A divorce does not have to mean the end of your business. Contact us today and find out how you can effectively protect your assets.