When many couples get divorced, they have two basic things that they focus on: splitting up the time that they’re going to spend with the children and splitting up the assets that they own. This can still get complicated, but those are the two areas of focus, and looking at it this way makes it feel simple.
For business owners who are also married, though, things get complicated. America revolves around small businesses, and many are owned jointly by married couples. If you’re getting a divorce, is there any way to keep that business?
If your spouse wants to sell, you need to buy
Say that you and your spouse are equal owners, meaning that 50% of the company belongs to them. You certainly could opt to do nothing at all with the business, meaning you are still co-owners after the divorce. However, many couples can’t imagine working together indefinitely after a romantic relationship ends. They know something must be done.
Selling the business is your second option. Doing so just converts the company into a financial asset, which you can then divide. If you can find a third-party buyer, they’ll take over the company and you and your ex will go your separate ways with 50% of the earnings.
If you want to keep the company and your spouse wants to sell, though, you need to buy that other half of the company from them. The most straightforward way to do this is to get a business loan and buy them out. You take on more debt, they get the money they deserve, and you get to keep running the business.
That said, you may be able to use other assets to your advantage. Are there joint assets, like a house, that your spouse wants to keep? You can have a valuation done and then trade assets to balance things out or at least reduce the cost of the company.
Carefully considering your options
What you choose to do will dramatically impact the company — and your life — moving forward. Be sure that you take the time to carefully consider all of the options that you have at your disposal.