This article originally appeared as a Gavel to Gavel guest column in the Journal Record on July 8, 2026.
By Phillips Murrrah attorney Hilda Loury
Business divorces are becoming increasingly common among closely held businesses in Oklahoma. A “business divorce” is a phrase that refers to the legal separation of business partners or co-owners of a company, typically involving a privately held entity like a limited liability company or a partnership. Like a marital divorce, a business divorce can be complex, emotional, and expensive. This article explores how to navigate a business divorce, as well as how to protect yourself now from the possibility of a messy business divorce in the future.
Common business divorce scenarios include long-time friends or family members going into business together—oftentimes without an executed, written operating agreement or clearly defined rights and duties. Moreover, the company’s books and records might be loosely kept, under the exclusive control of a single member, and/or dependent on paid subscription-based software. Equally problematic is when dealings among business partners are governed solely by handshakes and promises. Sometimes, one of the business partners unexpectedly turns out to be a bad actor or breaches a fiduciary duty. Accordingly, a business divorce among a company operated in this manner might be the most difficult to navigate.
But like its marital counterpart, a messy business divorce can be avoided with proper planning and documentation. Some examples include:
- Adopt a signed, written operating agreement. An operating agreement serves as a legally binding governing document of a business, and it should outline the financial, managerial, and operational rules of a business, including but not limited to each member’s ownership percentage and initial contributions, profit and loss distribution, management structure, and a negotiated buy-sell clause that addresses triggering events and mechanisms for a member buy-out. In the event of a business dispute, the operating agreement is the primary reference point for a judge or mediator. Otherwise, state law governs.
- Maintain organized company books and records that all members have reasonable access to. Generally, all members of a company are entitled to reasonably inspect core company documents, such as the articles of organization, operating agreement, tax returns, and other primary financial documents. In a smaller business, it is usually a red flag for a single member to have exclusive control over books and records or to make inspection of them difficult. Additionally, keep organized and dated records of all initial contributions and additional contributions, whether made in cash, property, assets, or services. Maintain backup records separate from any subscription-based software in the event the service is canceled.
- Document key communications. All agreements, contracts, and promises should be made in writing, whether by paper, email, or text message, or by recording, to ensure clarity and mutual understanding and to avoid disputes over fading memories or enforceability issues under the statute of frauds.
If you are currently undergoing a business divorce, it is important to avoid worsening the situation by setting up a competing business, poaching employees, transferring cash, property, and assets, or destroying books and records. Instead, you should consult an attorney.
About the author:
Hilda Loury is a litigation attorney at the law firm of Phillips Murrah who represents individuals and both privately-held and public companies in a wide range of civil litigation matters
CONTACT: hloury@phillipsmurrah.com | 405.552.2409
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