You spent a lot of time and effort working with your spouse to build a successful business. But now, an event has happened that has thrown the future of the business, and your role in it, up in the air. You and your spouse are divorcing.
When a married couple that also runs a business together gets divorced, among the big issues to tackle in the divorce is what will happen with the business. As a NerdWallet article notes, there are multiple ways this issue could be resolved.
Some of these potential resolutions could involve you giving up your role in the business. This includes agreeing to be bought out of the business by your ex or you and your ex agreeing to sell off or close down the business.
But what if you would rather stay a part of the company following a divorce? There are two main routes generally available on this front.
No longer marital partners, but still business partners: Continuing to run the company with your ex
You and your ex may decide that it would be best for your business to keep running the company together. This is an option for divorcing couples, though it is one that certainly has its challenges. The stress and emotions of a divorce and its aftermath could make working together for the business’ well-being difficult.
So, when you are pursuing this route, trying to keep the potential for future conflict down can be important. Things you can do towards this including keeping personal matters out of the workplace and working with your ex to establish clear expectations on what roles you and your ex will have in the business moving forward.
Taking sole control: Buying out your ex
Oftentimes though, continuing to run a business together isn’t a realistic, workable or attractive option for a divorcing couple. You may instead wish to have full control of your company, with your ex cutting ties with the business.
This could be brought about through reaching an agreement with your spouse in the divorce to buy him or her out of the business. Many things can have big impacts in such an agreement, including:
- What the agreement uses as the business’ value
- Whether the buyout will involve a lump-sum payment or installments
- If the buyout involves installment payments, how long the payments will continue
So, it can be important to exercise care and have good legal guidance when pursuing this route. This can particularly be the case in negotiations with your ex regarding the terms of a buyout.