Business ownership disputes can be difficult enough to handle by themselves. However, the situation can become even more complicated if your business partner is also your spouse. Not only are there important business matters to consider, but these also become mixed up in the emotionally painful process of dissolving a marriage.
However, it is possible to successfully handle the family business in a divorce. Here are some ideas about how you can accomplish that.
Plan ahead
As a couple who owns a business together, you should plan for the contingency that your marriage may eventually end. One way to do so is to make provisions for business matters in a prenuptial agreement.
If it is too late for that, however, another option is a shareholder agreement that outlines each spouse’s rights and responsibilities as business partners. A postnuptial agreement is a consideration as well.
Avoid litigation
Regardless of who wins a lengthy divorce court battle, both you and your spouse could ultimately end up the losers. The litigation process could ultimately cause the business to go bankrupt, meaning that the concessions that you and/or your spouse have won from the court in regard to the business will be worthless to you.
Have the business valued
When deciding how to handle the business during your divorce, you will need to know what it is actually worth. For this, you should arrange for an independent valuation.
Consider an exchange
One of the most common ways of resolving this particular type of ownership dispute is for one spouse to buy out the other’s interest in the company. If there are insufficient assets to do this, a possible solution is an exchange of other marital assets of comparable value.
Sell the business as a last resort
There are usually better ways to resolve the dispute than selling the business and splitting the proceeds between you. However, it is an option if you cannot settle on a breakup agreement otherwise.
