Division of Company Shares in Divorce

In divorce proceedings, certain criteria are considered when dividing assets, particularly in the context of joint ventures in a company. While the partnership continues after divorce if both spouses are partners, the fact that only one spouse is a partner in the company raises the issue of distinguishing between personal and acquired assets when determining the division of property.

Personal and acquired property in divorce

In divorce proceedings, the division of property between spouses involves a distinction between acquired and personal property. As a rule, the property regime governing assets acquired during marriage is the community property regime. However, with the amendment to the Turkish Civil Code, this differs depending on whether the ownership of shares was acquired before or after 2002. Assets acquired during marriage before 2002 are considered personal property, while those acquired after 2002 are considered acquired property.

Partnership in family businesses after divorce

On the other hand, in family businesses, which are among the most common types of companies in our country, an individual acquires their shares in the family business solely by virtue of being a member of that family. Therefore, the shares are considered the personal property of their owner. Furthermore, the distinction between personal and acquired property can be clarified by contract between spouses during the marriage. Thus, with a property regime agreement made during the marriage, assets acquired by a spouse while pursuing their profession or assets earned from company activities can be considered "personal property" and excluded from division during divorce proceedings.

The division of company share "values"

In divorce proceedings, what is subject to division is not the company shares themselves, but their value. If the company shares are personal property rather than acquired property, only undistributed dividends are included in the liquidation. Another issue considered in the division of assets/shares/values ​​in a company owned by one spouse during a divorce is the capital contribution made by one spouse to the company in which they hold a share. In this case, payments distributed to the shareholders of the relevant company are evaluated. Indeed, capital contributions are considered within the scope of acquired property.

Increased company assets in divorce

Another issue that arises in divorce cases involving companies is the increase in the company's assets through capital contributed by one spouse. However, in this case, the increase in value can only be included in the division of assets if its connection to the company is clearly proven.

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