If you and your spouse are joint business owners, one option during divorce is to sell the company. This simplifies asset division. Since both of you have ownership, you can sell the business and split the proceeds.
However, you may be uncomfortable with this idea because you want to keep working at the business. It may be your passion and your primary source of income. Fortunately, divorce doesn’t have to spell the end of your company. There are a few other options to consider.
Buying your spouse’s share
One common solution is to buy out the portion of the business you don’t already own. For instance, you might take out a business loan or bring in a new investor to purchase your spouse’s share based on the company’s valuation. Alternatively, your spouse may want other assets—such as a retirement account or the family home—and you may be able to negotiate an exchange so you keep the business and they receive other marital property.
Continuing to work together
In high-conflict divorces, continuing to work together after the split is rarely viable. But in more amicable situations, it is possible for both parties to continue working together. You could establish a formal business partnership agreement and remain co-owners, keeping your roles within the company separate from your personal relationship.
What should you do?
What works best will depend on your specific situation, financial goals and long-term plans. Be sure to explore all of your legal options before making any final decisions. It may help to have guidance from an experienced law firm at this time.
