Most couples are aware that if they decide to divorce that they will need to account for their assets and liabilities so they can be divided equitably. This is fairly straightforward with furniture, houses or cars, for example but may seem more complex if they have a business in common.
Business valuation and options
First, it’s important for the couple to have a business valuation completed by an objective, third party. Then, there are a few options they may want to consider.
The couple may decide that one spouse should keep the business. Usually, if one spouse runs the business, he or she will buy out the other spouse’s interest based on its appraised value. If he or she does not have enough money to do this in one transaction, he or she may be able to pay for it in installments over time.
In some situations, the spouses decide to both keep the business. Some spouses realize that although their marriage isn’t going to work, they can still be productive business partners. This option may work best with couples who can set their emotions aside and remain focused only on the business.
Finally, some spouses may decide that the best option is to sell the business. While this can take longer than the other two options, it will allow the spouses to divide the funds from the sale and go their separate ways. Some spouses may choose this option if they are interested in starting their own business or want money to start a new life on their own.
If couples own a business in common and need guidance about how to divide it equitably, an experienced attorney can help.