Going through a divorce is a difficult situation that becomes even more complicated if you own a family business. There’s a chance that the divorce will affect the fate of the company, so you should think about that when you’re handling the property division.
You and your ex will likely have to decide what to do with the company. There are three broad options that you can use if you don’t want to close the company and divide the profits that are still available once that’s done.
#1: Sell the company
Established companies might be sold, but this can take time. You should have the business valuated. If it’s sold, the determination about how to split the profits from the sale must be made. Remember, you must account for expenses related to the sale and those that occur leading up to the sale of the business.
#2: Buy out the business
One spouse may opt to buy out the other spouse’s share of the company. This means that you need to have it valuated so you know what the buyout should be. The buy out may come in the form of a cash payment or in exchange for other assets in the property division process. Having an accurate valuation is crucial to ensure this is handled appropriately.
#3: Continue co-ownership
Some people who get divorced still have a good working relationship and only needed to end the romantic ties. They may choose to continue to run the company together. This requires them to have a solid contract governing the partnership. They should also consider setting standards for times when personal life and business life might intersect if they believe that will become an issue later.
Going through a divorce isn’t ever an easy journey. Business owners must think about the fate of the company while they’re handling the divorce. Working with someone knowledgeable in this area is beneficial because they may be able to discuss the options with you so you can make an informed decision about how to proceed.