When business partners divorce, what happens to the business?

On Behalf of | Sep 27, 2021 | Divorce & Family Law |

If you and your spouse decide to get a divorce, you have a lot of personal issues that you need to address, such as who gets custody of the children or exactly how you want to split up your marital assets. All of these choices are related to your own life and what it takes to divide your life from that of your spouse.

If the two of you are business owners, though, some of the focus has to shift to a more business-oriented direction. You started this family business together, the two of you are the sole owners, and now you have to decide how these choices in your personal life are going to impact your professional life.

Buying half of the company

If one of you wants to control the entire company, a simple option is to buy the half that your spouse controls. Depending on the value of the business, you may need a loan to do so. You may also find that your spouse will accept marital assets as a way to offset the cost. For instance, if their half of the business is valued at $300,000 and you have a $600,000 home that you both own, they may take full ownership of the home and let you take the business.

Selling the entire company

Buying half of a business may prove impossible or too expensive to be realistic. Your second option, then, is to sell the entire business or your share to someone else. You will make money in this sale, and you and your spouse can then split the money. If you’d like to use your earnings to start your own business after the divorce, you can do so.

Working together after divorce

Finally, remember that divorce does not mean you are no longer allowed to work together. You can keep the business and maintain your roles as co-owners. Just be very sure that you and your ex will be able to keep your personal life separate from your professional life, making it possible to get along professionally.

If your divorce gets this complicated, it’s critical to understand your legal options. It can also help to work with an experienced team that has been through it before.