For family business owners, divorce is always a potential threat to the success of the company. If a married couple owns a business together, their own personal divorce makes things very complicated for the business moving forward.
In many cases, the business has to close. In other cases, the couple will sell the business to a third party. They both move on, and that’s the end of the family business for them – even if it’s not the end of the business overall. But are there any other options?
2 ways to keep the business
One option would be for one spouse to buy the other person’s share in the business. They may be able to do this by giving up marital assets like an investment portfolio, a family home or a retirement fund. They may also be able to take out a business loan or find investors so that they can purchase that share directly. Either way, this gives them the ability to take over as the sole business owner and keep running the company even after the divorce.
Another option, however, is for the divorced couple to continue working as business partners. They don’t have to sell the business or change anything professionally. They could actually just draft a partnership agreement and retain the 50% ownership shares that they already have. Couples who go through an amicable divorce may find it easy to keep working together.
Steps to take during divorce
Are you going through a divorce as a business owner? It can be complicated, so make sure you know what legal options you have.