Family businesses take a lot of work and sacrifice from everyone involved. While a family business is often a source of pride for a couple, it’s also something that can cause problems if the marriage fails. Trying to determine what should happen to a business when the owners are getting a divorce can be a challenge.
There are several ways that the business might be handled. It’s up to the owners to determine which option is preferable. The business might need to be closed or sold when the owners split. In some cases, the family business may survive the divorce.
What happens if the business remains in the family?
If the business remains in the family, there needs to be a clear plan for what’s going to happen. One thing that will impact what happens is whether both parties continue to run the company or if one buys the other out. You’ll need a written agreement even if one party is buying the other one out. This helps to ensure that both parties are protected during the sale.
When both parties continue to run the business, there must be a clear agreement about who is going to do what. Outlining these duties, as well as the pay structure and other similar points, can help to prevent issues in the future.
You should also have a conflict resolution method so that interpersonal issues don’t impact the company. Having this in writing is beneficial so that you and your ex can refer to the terms when necessary.
Deciding what to do with a family business in a divorce can be a very complex process with a lot of steps. It’s smart to start working with an experienced advocate as early as you can. That’s the best way to protect both your business interests and your personal ones.