The time, energy and effort it takes to build a family business can impact everyone in the household. Many people who have these businesses take considerable pride in their success. But that success can sometimes become a liability if the owners decide they’re going to divorce.
One of the major decisions that divorcing small business owners have to make is what will happen to the business. They sometimes choose to shut the business down, which requires them to determine how to handle the debts that may come with that decision. In other cases, the owners may exercise other options.
Selling the business
Some small business owners who are going through a divorce choose to sell the business so they can each have a fresh start. One necessary step they must take is to have the business valued so they have a firm grasp of what the business is worth. They will have to decide on what constitutes an acceptable offer and work together to ensure the division of any potential profit is equitable.
Co-owning the business
Another option is to co-own the business, which would require the owners to establish a partnership agreement. This should outline every facet of the agreement between them in a comprehensive manner so they can avoid issues in the future.
The family business is only one of the considerations they have during the property division process. Taking the time to get everything set can be challenging, so it may behoove them to work with someone familiar with these matters.