Divorce can be complex for individuals who own a business together. For instance, say that a couple meets at culinary school, gets married and opens their own restaurant. Getting divorced means that they’ll have to figure out what they’re going to do with this business that they’ve created together. It’s an extra layer of complication that other couples don’t have to face.
The good news is that there are numerous solutions to the challenge of fairly dividing a couple’s interests in a family business. Below are three of the most common, which you may want to consider if you’re in this position.
Selling the business
Of course, one potential option is always to sell the company. The two co-owners can then get divorced and split up the value of the proceeds that they earned in the sale of that business. Sometimes, people will use this money as a way to launch their own companies after a divorce has been finalized.
Buying half of the business
Another solution is that one person will buy the other person’s half of the business. This approach is often attractive if the couple can’t agree on another solution and it doesn’t make sense to handle the company’s value differently in the broader context of asset division. One person wants to keep running the company, for instance, but the other person just wants to get their money out of it. Both things are possible in this scenario, where one spouse “sells” their share directly to the other.
Continuing to work together
Finally, a couple can continue working together as business owners. They don’t have to sell the business, and business owners certainly don’t have to be married. They can get divorced and just keep working together professionally, even though their romantic relationship is over. They may want to consider drafting a new partnership agreement and other legal documents since they are no longer married and need to define their restructured business relationship.
Of course, not all couples can manage to make this kind of arrangement work. They may need a clean split where they don’t see each other every day. But it is an option for those who can get through emotional hurdles. This option also helps to illustrate why business owners who are getting divorced need to carefully explore all of the legal opportunities at their disposal as they look for an optimal solution. Creative solutions abound when a couple is willing to seek legal guidance and keep open minds.
