Many small businesses are jointly owned by married couples. Often, they will operate as business partners, each focusing on one area of the business’s growth and day-to-day operations. They both have an ownership share and they both contribute to the business’s increasing value.
This can make things complicated if that couple decides to get a divorce because the business is a marital asset. There are three options that can be used during property division.
Nothing changes
First of all, couples should always remember that they do not necessarily have to sell the business or change anything. They can still be business partners even after they get divorced. It typically just depends on whether they are on good terms or if it is a high-conflict divorce and they cannot work together after it concludes.
One person stays
When the former spouses no longer want to work together, a common solution is for one spouse to buy out the other person’s ownership. This allows them to become the sole owner and stay with the business. The main hurdle to doing this is simply coming up with the funds to purchase half of the business or surrendering other marital assets during property division.
Both people sell the company
Finally, if no other solution can be reached, many couples will just sell the business completely. Once a third party has purchased it, then all they have to do is divide the proceeds from the sale.
Divorcing as business owners can be complicated, which is why it is so important to know exactly what options you have and what legal steps to take.
