When two divorcing individuals happen to own a business together, it is important for both parties to be aware of their options regarding the future of the business post-divorce. A business, like all other marital property, will be equitably divided by the courts upon a divorce. Before this can be done, many things must be considered, including the value of the business; the fitness of each party to run the business; the implications for selling the business regarding the lives of its employees; and the financial health of the business as the changes are made. Every business-owning couple is different, and because of this, there is not one single option which is better than the other. The following describes a few options to consider as you decide how to handle your business upon divorcing.
Buyout one spouse’s share. Depending on the past, present, and future projected success of the business, one divorcing party may desire to buy the other party’s share of the company rather than selling the business and dividing the assets. This option would result in the sole ownership of the business by only of the divorcing parties. Before the buyout can occur, the business must be properly valuated, which can be done through the assistance of a divorce attorney experienced in business valuation matters.
Sell the business and divide the assets. Many times both partners will agree to sell the business and divide the assets as the courts see fit. This is an excellent idea for couples who agree that running the business alone would be too difficult for either spouse. In order to do so, the business must be valuated and all debts and assets must be assessed. Your divorce attorney will be a valuable asset as you proceed with the dissolution of the business and equitable division of assets.
Continue to co-own. In some unique situations, divorcing couples are able to continue managing the business together after the divorce settlement. This option requires a great amount of communication, and is not recommended for every business owning couple seeking a divorce. However, if you are able to make a business partnership with your ex work effectively, then continuing to run the business together may be your best option.
For more information on your options regarding divorce and how it affects a family business, feel free to contact the Law Office of Bradley R. Tengler at 815-981-459 for a free consultation. Please not, the above does not constitute legal advice. Please discuss your specific rights with an attorney in your own jurisdiction.