Family businesses are incredibly common, but they can come with some interesting complexities. For example, maybe two people decided to get married, and then they later started a business together. Now they’ve decided that they’re going to get divorced.
If they weren’t joint business owners, this would just be a decision that impacts their personal life. But they do own that business together, so what are they supposed to do with it when they get divorced?
The first option is to find a third-party who would like to take over the business and then to sell it. The couple can split up their marital assets during the divorce, including the money that they make in the sale. The third-party party then takes over the business, and the two divorced individuals can take the money that they’ve earned and go their own ways. They may choose to start new businesses on their own, for instance.
Only one person keeps it
In a lot of cases, though, one business owner doesn’t want to sell and be cut out of the company. They do want to continue owning it and running it. This is certainly possible, but it means having a valuation done and then buying out your business partner for the value of that company. If you both own 50% of the business, for example, your ex is still going to want their 50% as if they had sold that company to a third party.
Keeping it together
Finally, you and your ex do have the option to simply continue to own the business. You can run it just as you did before the divorce. You don’t have to be married to be business partners, although you may want to consider putting a partnership agreement in place or using other contractual guarantees to protect your investment and your relationship. Also, this is notably too difficult for some couples to do, as they simply cannot work that closely together after a divorce.
Considering your options
These are your three main options that you have. As you consider them and move toward your divorce, make sure you know about the legal steps to take.