Family business owners sometimes get divorced, and it causes a major shift in their life. These people may have been co-owners of the family business, so it is the only income for the family – and for both partners. As such, both their professional and personal lives are going to be changing due to the divorce.
When divorce is inevitable, people are sometimes worried about what’s going to happen to the business. Here are three options to consider.
Buying out the other spouse’s share
Often, couples want to go their separate ways after the divorce, so they’re not going to continue working together. However, if one person wants to stay, they may need to buy out the other person’s share. They can do this during the divorce, while dividing other marital property.
Selling the company
There are cases where buying the other half of the business is just too expensive or unrealistic. Additionally, the business may have a very high valuation, so the couple sees a chance to make significant money from selling it. They could sell the business to a third party, and then property division is as easy as splitting the earnings.
Continuing to work together
Finally, it is possible for some divorced couples to be joint business owners. Maybe you and your spouse are still on good terms, and you know that both of you contribute to the company and make it successful. You could decide to draft a partnership agreement and remain co-owners, even though you’re no longer married.
Getting divorced can be complex, especially with business assets. Be sure you understand all of the options. Having experienced legal guidance is crucial.