You and your spouse own a family business together. When you started it five years ago, you were just excited that the two of you would get to do more together and create your own career. You loved what the business offered for your family, and you still do. You believe it can be successful and you enjoy working there.
None of that has changed, but your marriage certainly has. You and your spouse have begun talking about divorce. What is this going to mean for your family business?
It is a marital asset
The first thing to know is that your business is a marital asset because the two of you own it together and you started it while you were married. This means that you both have a right to that business. You may not have an official partnership agreement with your spouse, but the business belongs to both of you and has to be split up during the divorce.
There are numerous ways to do this. The most common is simply to sell the business. You could sell it to someone else entirely and divide the money that you get from them, or you could sell your share to your spouse. Alternatively, if you want to keep the business and your spouse does not, you could buy their share.
There are some hurdles to this, especially if you want to buy half of the business. You need to have a valuation done on that business and you need to be able to afford it. Some business owners don’t have the cash on hand to buy the other half of the business from their spouse, and they may find it difficult to obtain the financing necessary to do so.
However, if you and your spouse are on good terms, there’s nothing saying that you have to sell that business. It is already divided evenly between the two of you, so you could simply continue to work there as co-owners. This can be difficult for some divorced couples, but it depends on your personal relationship. If you’re in a place where you know you can work together professionally, then this could be a very reasonable option for you.
Working through the process
With both your marriage and your career on the line, it’s very important to understand your legal options as you work through this process.