Running a business is a major undertaking. For couples who start one together, the burden of the business is likely divided between both. What they may not realize is that running a business together, as well as other factors, can put a strain on their marriage. That can even lead to divorce — and that, in turn, complicates their business situation.
Business owners who go through a divorce have to determine what’s going to happen to their company. There are a few possibilities, so they must be considered carefully.
The 4 primary options for dealing with your business
There are four primary options present when you’re trying to determine what to do with the family business:
- Sell the business to an outside party
- One person buys the other one out
- Close the business
- Own and run the company together
If you’re going to sell the business or use a buyout, you need a business valuation that lets you know what the business is worth. You won’t need this if you’re going to close the company — but you will have to determine how to handle the sale of assets and business debts.
If you and your ex will keep the business and run it together, you must agree on a plan to make this successful. Outlining as much as you can about the business can help to make it much easier. Think about things like how pay and expenses will be handled. Write out who will have what duties. Additionally, set up a conflict resolution plan for times when there are disagreements.
The decision to divorce has a direct impact on the business. Regardless of what you decide to do with the business, you need to ensure that everything is documented (in writing) related to your agreements. This will likely have a direct impact on your property division settlement for the divorce.