Getting divorced is never easy, even when the divorce is cordial. While you are married, you commingle nearly all aspects of your life. When you get divorced, you need to separate most of those aspects.
This often entails at least one party moving to a new home, separating finances, and potentially adjusting relationships with friends and family. One of the biggest complications is what to do when you and your spouse co-own a business. The following are ways to handle a divorce that involves a jointly owned business.
No Change
Even if you don’t want to continue a romantic relationship with your spouse, that doesn’t necessarily mean that you don’t want to continue a business relationship. If there is little to no bad blood between you and your spouse, you can continue running the business the same as before.
You should still have an attorney look over your business agreement to ensure it doesn’t assume a marital relationship and make changes if it does. But otherwise, when possible, this is the optimal solution in terms of simplicity.
Buy Out Your Spouse
If you don’t think it will be possible to continue having a working relationship with your spouse, you may want to consider buying their share of the business. There are several factors to consider when buying out your spouse.
First, you need to consider whether the business can continue to function without your spouse. If, for example, your spouse performs necessary creative duties, the business may not be able to function without them.
Second, you need to determine whether you can afford to buy them out. If you have a successful business, you might have to take out a loan to afford this expenditure, and getting credit is much more difficult during a Michigan Divorce. If your spouse is amenable, you might be able to set up a payment plan.
Conversely, you might decide to sell the business to your spouse. This reverses the potential problems.
Sell the Business to Another Party
When other options aren’t on the table, your best bet may be to sell the business, split the profits based on ownership percentage, and go your separate ways. This removes any business relationship with your spouse.
If you can’t agree to an arrangement with your spouse about how to deal with the business after the divorce, there is a good chance that this is the option that the courts will decide is optimal.
It is typically better to choose to sell your business to another party, and have as much time to get a good deal as possible, than to be forced to sell by the courts and have a much less flexible timeline.
Contact Gucciardo Family Law Today
If you own a business with your spouse, determining what to do with that business after the divorce can be as much of a headache as the rest of the divorce issues combined. Contact our law firm as soon as you are considering a Michigan divorce to get experienced help making the right decision for your future.
