If you’re divorcing and own a business, it might be tough to decide how you want to divide it. Usually, you have a few options. You could sell the business. One person could keep the business. Alternatively, you could both continue to run the business together.
Deciding which of these is right for you is the first step. For some people, it’s easy to opt to keep the business open, because their business relationship is fine while their marital relationship is not. If you can separate your feelings about your spouse from your work, then that might work for you, too.
For others, selling the business might be a better option. Alternatively, if one spouse wants the business and the other doesn’t, buying out the other partner’s share is a good option.
What should you do if you want to keep your business?
If you want to keep your family business, there are a few things you can do.
1. Talk to your spouse about your preferences
To start with, it’s appropriate to talk to your spouse about your preferences in terms of what you’d like to do with the business. Both of you may have the same ideas about the future of the business, or you might not. If you both agree, that’s great. If not, then you should move on to negotiating for the business.
2. Get an appraisal for your business
The next thing to do is to get an appraisal for the business. You need to know how much it is worth to be able to negotiate for it or its value while separating your property.
3. Buy out your spouse’s share
Finally, once you know the value, and if your spouse agrees, you can buy their share of the business. For example, if you have both invested $50,000 into the business, then you may need to buy out at least $50,000 when you purchase their share of the business from them. This can come in the form of other assets or items that you are willing to give up, or you can offer cash or payments.
These are three things to consider if you want to keep your business after a divorce. Negotiating is key to success in these cases, and you should work closely with an experienced family law attorney who will go the extra mile to ensure a fair result.