Divorce is a messy process for most people. When there is a small business involved in the split, things can get even more complex. If you’re facing a divorce with a business, you’re going to have to determine the fate of the company. In the vast majority of cases like this, both parties have to work together to figure things out.
There are several options that you should review regarding the business. Once you have gone over all these, you can determine what you feel is the best one for the current situation. Here are a few of the options you might have for the small business:
- Close the business
- Sell the company
- One party buys the other out
- Both parties continue joint ownership
No matter which option is chosen, you and your ex will need to set up a contract that outlines what each party is due. If you close the business or sell it, the responsibilities for assets and liabilities should be written out. If one party buys the other out, the terms of the sale must be documented.
If you continue with joint ownership after the legal end of the marriage, the duties of each person should be clear, as well as the method for profit division and the way that dispute resolution will be handled. The more information you have set in the documentation, the less likely there will be problems in the future.
One of the primary things that must be done is the valuation of the business. This gives you valuable information that you can use as you negotiate. Your attorney can help you to determine how to handle the situation once you know the direction you want to take.