Own A Business And Getting A Divorce? What Are Your Options?
Posted on: 11 February 2016Share
If you and your spouse have opened a business together and have not made the decision to end your marriage, the business is likely considered marital property. More than likely, if you have both been operating the reins of the business and partaking in day-o-day business activities, you are both going to want to maintain control of the assets. This can lead to a very messy fight in and out of the court room. Before it gets to that, you may want to consider what your options are in this scenario:
Maintain Joint Ownership and Continue Normal Operations.
If you and your spouse are able to enjoy the benefits of an amicable split and can still get along well enough with each other, you may be able to continue running the business as you have up to this point. In doing so, you can maintain joint ownership and operation of the business. However, this isn't a viable option if you are having problems communicating with one another or the divorce is hot-blooded.
Buy the Other Spouse Out.
In the instance that you cannot maintain joint ownership, you could consider buying the other spouse out. You would keep the business and pay your spouse a certain pre-determined amount for their interest in the business. This is usually ideal when one spouse has a larger role in the operations of the business than the other spouse. If you don't have the cash to do this, you may be able to work out a deal with your spouse by giving up the vacation home, a piece of valuable artwork, or something else in the divorce that they want.
If a financial advisor tells you that it doesn't make sense to split the business, then selling it may be something to consider. When the business sale is finalized, you and your spouse can both receive a cash payment. Depending on how much each of you were involved in the business, the proceeds can be divided in half, 60/40, etc. The problem with selling is that it can take months for a business to sell.
Liquidate Business Assets.
If it doesn't seem as if the business will sell on the open market, but there is hope with your business equipment, you may want to consider liquidating your assets. Like selling the business itself, you'll sell the assets of the business and split the profit. Assets include operating equipment, surplus inventory and even real estate.
Speak to an attorney about your options. Make sure you understand the pros and cons of each option in order to make a well-informed decision. Your lawyer can help you make a final decision that is most ideal for your individual circumstances. Contact a business, such as Metropolitan Lawyer Referral Service Inc, for help finding a lawyer.