Family businesses are common, but so is divorce. Inevitably, this means that some of the couples who get divorced every year are also business partners. In fact, there’s a good chance that the business is one of the most valuable and expensive assets that they own together.
So, what happens to it when the marriage ends? Here are three potential options:
Nothing changes
First of all, couples need to know that they don’t necessarily have to change anything. They can become business partners and work together. Even if they get divorced, they can continue to share ownership of the company. This is often easy from a logistical or financial perspective, but may be more difficult for some couples from an emotional perspective.
Selling the company
One of the most common solutions is just to sell the business. After all, couples have to divide assets. But it’s hard to divide tangible assets and easier to split up financial assets. When selling the business, the couple can easily divide the earnings.
One person becomes the sole owner
The final option is for one spouse to take over the position as sole owner of the business. To do this, they have to buy out the ownership share held by the other spouse. Depending on the valuation of the business, they may be able to do this with financial assets or even other tangible assets during property division. They may also be able to take out a business loan or bring on other partners and investors.
Divorce can be complicated, especially with high-value assets. Couples who are going through this process need to know what steps to take.