What happens to the family business during divorce?

On Behalf of | Nov 7, 2022 | Family Law |

You and your spouse had similar visions when you married as well as when you began a start-up company. Through years of dedication, sacrifice and difficult decisions, the two of you were able to build your company into a successful one.

As your marital union unravels, you wonder what will become of your business. There are certain options, including keeping the company running.

Continue, a buyout or sale

When married business owners divorce, here are potential scenarios regarding the fate of your company:

  • Continue to maintain the business together: Your business partnership has been a good one, and you recognize that. The results are clearly seen in the success of the company. But remember, the option of continuing to work alongside an ex-spouse may be difficult. It is crucial to keep the emotions related to your marriage and divorce at bay. This is not a realistic option for every business owner.
  • Buying out your former spouse: With some determination, grit and the support of business loans, you can pursue this option as long as you know that you likely can keep the business successfully running. Buying your former spouse’s share of the business will take solid negotiation skills. You also may have to seek investors and find a new business partner, hearkening back to the days when you started the business.
  • Sell the company: This likely represents the most realistic option. Granted, it will be difficult to say goodbye to a business that you had a hand in building from scratch. Selling the company may provide you with the right amount of seed money to start another business. You are an entrepreneur, after all.

The negotiation aspect comes to the forefront in divorce as well as the outcome of your business.

Consider your options

It may not be easy to part with a business that you helped create. But that may be the best choice when married couples who are business partners divorce. But before you decide to do this, give other options serious consideration. You may gain a fresh start with any of these choices.