Family businesses often depend on both adults to run the company. This arrangement might work well while the marriage is in good condition, but the company can become a liability if the marriage fails.
If you and your spouse own a business and decide to go through a divorce, one of the first things you’ll have to decide is what should happen to the company. This might not be an easy decision, but it’s one that can have a significant impact on the future.
Keep the business open or close it?
The primary decision that must be made is whether the business will remain open or closed. If the business remains open, ownership has to be decided. This may involve your or your ex buying the other person out of their share of the company. Alternatively, you and your ex may choose to operate the business as a team. This will likely require a partnership or operating agreement.
If the business is closed, you and your ex will have to ensure bills are paid. Anything left after that happens may be divided. This is also what may happen if the business is sold instead of just being closed. It’s critical that you and your ex agree on the terms associated with closing or selling the business.
The business is only one thing that has to be handled during the property division process. Ensuring that you have a comprehensive look at the finances and what needs to be done is critical. This might be easier if you work with someone who can help you to understand the options you have and how they may impact your future.