Divorce is a difficult experience, even under the best of conditions. When a divorcing couple owns a business together, the situation becomes more complex.
One of the primary questions that’s at the forefront of the situation is what will happen to the company. There are several options that are possible, and which of these is most appropriate for a couple’s unique circumstances depends on the ins and outs of their situation.
Sell or close the business
The business may be sold or the owners may just close the doors. If the business is sold, it must go through the valuation process. This involves a professional coming in to go over the financial aspects of the company to determine its actual value. Once this is done, a buyer will be able to make an offer on the business. If no buyer is found, the company may close.
Keep the company open
Another option is to keep the company open and running. If there are employees involved, they may want to know what’s going on with the company and what their fate will be. This may involve two specific options.
One way to keep the company open is for one spouse to buy out the other. This enables one person to keep running the business. The buyout can occur in a variety of ways, including using a loan to pay cash or by offering other assets as part of the property division process.
Another option is for both owners to continue to own the business together. If this is the case, a sold partnership agreement must be put into place to keep the business and both owners protected. This should include everything from who is responsible for which decisions to how profits and expenses will be handled.
Logical thinking must override emotions so each spouse can make choices that will benefit their future. Working through the property division process can take a lot of thought, planning and effort. Having a legal representative to explain the options can be beneficial for anyone who’s going through this process.
