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How will the family business fare in the divorce action?

On Behalf of | Jul 30, 2018 | Uncategorized |

When you married and started a business together, you probably did not think divorce would ever become part of the picture.

Unfortunately, your marriage is ending. What do you and your spouse intend to do about the business?

Count your business as an asset

Remember that your business is an asset that you will have to address in the property division phase of your divorce. Some couples have prenuptial agreements in which they address the disposition of the business if the married owners should part ways. If no such agreement exists, you will now have to consider one of three options: continue on as business partners, perform a buyout or sell the business outright.

Continue on

If you are facing an amicable divorce, you might give thought as to whether you and your soon-to-be ex can continue to work together. Both of you may have important roles in the company, and you may feel that continuing as partners would be in the best interests of the business. Can you do that? Think carefully about whether the two of you could keep on working together after the divorce.

Buy your spouse out

Another option is for one of you to buy the other out. To do so, you will have to hire an appraiser to place a value on your company. You will also have to come up with the funds for the buyout or give your spouse an asset of equal value.

Sell the company

The third option is for the two of you to sell the business. Again, you would need a valuation so that you can arrive at the proper selling price. Once the business is sold, you and your spouse would split the profits and move on with your lives. Keep in mind that you would be free to start another business, if you so choose.

Consider the many angles

Business owners who are about to divorce sometimes forget about details such as the tax consequences or the cost of maintaining the business. Your company is a valuable asset. Be sure you look at the situation from all angles before deciding how to deal with the business when you divorce.