Tying the knot with someone combines many aspects of your life. If you not only married but went into business together, then your lives are well and truly entangled.
When trying to untie yourself in a divorce, you need to ensure you do not harm your company in the process. Divorce will be tough on your finances, so your business income could be crucial.
There are several ways to deal with your company in a divorce
While you may not be able to work with each other now, things could change. Here are some options to consider:
- You sell it: You can use the money to pay off any debts and divide the rest. You will, however, lose any future income the business may have generated.
- You shut it down: This is not ideal, as you will waste all the hard work you put in and the goodwill you built up. Yet, it is an option if the business is hard to sell, either due to its personal nature or because it is doing poorly.
- One of you buys the other out: You do not need the cash to do this. Your business is just one of many assets you need to divide. If you value the company at $2 million, then to buy your spouse out, you need to give them assets worth $1 million in exchange for their share of the company.
- You continue in business together: Maybe separating your personal life will give you enough space to continue working together. Or perhaps one of you handles the day-to-day stuff and the other steps aside but retains shares. If the business provides a good income, it allows you both to benefit. It will also be a good option if you hope your children will take over.
If you treat property division as a business matter rather than an emotional one, you are more likely you make the right decisions. As with any business matter, getting sound advice is essential.