Marriage is the union of two lives. If you are a business owner, marriage can also be the union of two owners.
When times are good, this may not be a concern; however, life can easily change. Divorce is common. Marriages often end due to spousal disagreements, especially those in financial nature.
If you own a business and you are considering divorce, it is a good time to think about how you want to move forward. Premarital solutions such as prenuptial agreements can alleviate some of the legwork needed in a divorce, but there are still options if you do not have one in place.
If you are divorcing without a prenuptial agreement, a postnuptial agreement may be a solution.
Before you decide what to do, it can be helpful to gather a list of considerations. Any divorce can be difficult, but there are more complexities involved when a couple shares a business. Money is important. Keep track of where it comes from, who spends what and when you pay expenses.
Here are some questions to consider:
- What kind of industry is your business in?
- What does the formal legal structure look like?
- What is your role in the company?
- What is your spouse’s role in the company?
- When were your assets acquired: before or after opening the business?
- Do you have children?
After taking a closer look at your business and how it fits in with your life, you can then ask yourself where you want to go next. Do you see yourself owning the business without your spouse? Could you work together as co-owners after the divorce? What matters most to you?
Business owners facing divorce typically have three options:
- One spouse can buy out the other to take on sole ownership of the business
- Spouses can agree to sell the business
- Spouses can remain co-owners after the divorce
Which of these options seems most realistic for you? Divorce brings great changes, and a business is a substantial investment. Taking time to think can pay off.