You don’t have to sell your business in divorce
Selling a business during a divorce is a common outcome for joint business owners. Perhaps you and your spouse got married 20 years ago and soon after opened a business together. Now that you are getting divorced, you may feel that selling the business and splitting the financial value is the easiest solution.
However, don’t assume that this is your only option. Just like with other major assets, such as real estate or the family home, there are alternative solutions worth considering. Take the time to explore what will work best in your situation.
Do you want to buy out your spouse’s share?
If you want to continue running the business after the divorce, you may be able to buy out your spouse’s ownership share. There are a few ways to do this. You could take out a loan to buy their share, similar to how you would purchase a business from a third party. You could also offer other marital assets in exchange for their share. For example, your spouse may prefer to take the value of your retirement savings, allowing you to retain full ownership of the business. You could then focus on rebuilding your retirement fund in the years to come.
Do you want to keep working together?
Divorce does not necessarily mean you can’t continue as business partners. If you are going through a high-conflict divorce, you may not want to work together. However, if the divorce is amicable and you both believe keeping the business intact is the best decision, you could draft a partnership agreement and continue operating as co-owners. This could even provide more financial stability for both of you after the divorce.
Exploring your options
The best course of action depends on your unique situation. Just make sure you understand all of your legal options before making any decisions.