As a business owner married to your co-owner, you have unique concerns and considerations as you navigate divorce. For instance, how does dissolving your marriage affect your company?
The American Bar Association offers three ways to tend to business interests during divorce. Learn how to protect the hard work and energy you invested in your company.
Work as co-owners
Depending on your current relationship with your soon-to-be-former spouse, the two of you may easily continue operating as co-owners. You can develop a plan that makes it easy to work together, such as working on alternating days or one of you handling primary management duties while the other receives a portion of all profits. You and your current partner can draft a formal written agreement for your new arrangement.
Buy out your spouse
You may have the financial reserves to buy your soon-to-be-ex-spouse’s business interest. Usually, divorcing couples with a co-owned business do not incur income tax if one of them buys the other out. If this seems workable, consider discussing it with a financial professional who works with divorcing business owners. That way, you do not spend more money than necessary.
Sell the company
Your finances or situation may make it difficult to buy out or work with your current spouse. If so, you may have little choice but to sell the company. You and your spouse split the proceeds, which you can use to start another business. With this option, educate yourself on the common difficulties of selling a company, such as poor economic conditions, geographic location and low business profits.
Divorce sends ripples throughout your life, sometimes in ways that remain unnoticed. With the right insights, you may better weather the storm and protect your entrepreneurial endeavors.
