Years ago, when you and your spouse started what is now a lucrative family business, a parting of the ways may never have entered your mind—but things change.
Now that divorce is about to become a reality, what will happen to your business?
One of you sells to the other
You may have invested more time and money in the business than your spouse has, or vice-versa. Therefore, one of you may want to sell out to the other. The first step would be to have your attorney or business appraiser perform a valuation. Once you know the value, one of you can purchase the other’s share at a fair price. If the buyer cannot come up with the funds, the two of you could consider an exchange of assets equal to the value of the business share.
You put the business on the market
Your second option is to sell the business outright and split the profit. Once again, you must arrange for a valuation. Keep in mind that if the business does not sell right away, you and your soon-to-be-ex will have to continue working together until it does.
You continue as co-owners
If you and your spouse are attached to the business and are not happy about the idea of selling it, your final option is to continue as co-owners. Some divorced couples can do this. If you believe that you and your ex can maintain a working relationship once the divorce is final, this might be the perfect solution. Furthermore, you would not have to incur the expense of a valuation.
Exercising more control
No doubt you put in a significant amount of time and effort to build your business into the successful company it is today. Perhaps you can work together through mediation to better control the terms regarding the disposition of the business. Mediation is much less expensive and time-consuming than litigation and may be a good option for you no matter how you choose to settle the future of your family business.