Divorcing from business: How couples can leave a family business

On Behalf of | Oct 6, 2021 | family law |

Couples are often financially intertwined during a divorce, making division a highly stressful process. Couples involved financially in a business venture can doubly find themselves in a bind.

Divorcing with a business is not as simple as dividing the company in two. Often, family businesses are too small to undergo divisions without financially dooming both parties. However, couples do have options for divorcing when it comes to business.

Business partnership

A divorcing couple may choose to work out personal differences and continue to operate as business associates. This instance would prove more to be the exception rather than the rule as many couples divorcing may find it hard to maintain any sort of a dependance on their former partner after the separation had occurred.

Business buyouts

A more reasonable option would be for the couple to engage in a business buyout. This scenario is straightforward, the couple determines who is to maintain ownership of the company and then work out some sort of a buyout plan.

This may be as simple as trading assets or as complicated as financing through other means. Couples who choose to buy out their partner may be able to work out a payment schedule with one partner slowly buying out the ownership of the other over a predetermined amount of time.

Selling portions or the whole

Purchasing their partner’s portion of the company may not be financially feasible. In this case, the couple may elect to sell either a portion, or the entire company, to a party not affiliated with the couple. While this leaves the fate of the company somewhat precarious if the couple elects to sell a portion rather than the entirety, it could be a more favorable option than selling the company altogether.

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