You fell in love. You got married. You started a business together, or one of you invited the other to join them in their existing business venture. Time passed. Your business thrived. Your marriage did not. Now what?
Do you have to sell the business in a divorce?
Divorcing your spouse does not necessarily mean you have to sell your business. You have options. You can:
- Buy out your spouse’s share of the business. Or your spouse can buy out your interest.
- Sell the business to a third party entirely or sell it with an option to continue working with the new owners.
- Remain co-owners. End the romance. Run the business.
The courts do not care about your business per se, except as it relates to its inclusion in a couple’s marital assets. If you started your company before the marriage, getting a divorce may have no impact on whether the business is considered your separate property and excluded from your mutual marital assets. However, suppose you started the business together or launched it after you got married? Or perhaps your spouse contributed to your business, or you invited him into your company to work with you? In these scenarios, all bets may be off, and your business is likely to be considered marital property and subject to the asset distribution laws of your state.
What if my husband won’t let me buy his share of our/my business?
Even when your husband won’t let you buy him out of your business, you still have options. You can negotiate. He may be holding out for a larger share of your other assets – your house, support, retirement funds, investments, etc. In these instances, you can offer your husband a greater portion of your other assets to equalize any potential money he might receive from the sale of your business. This option also is in line with the court’s interest in achieving an equitable distribution of a couple’s assets.
What if your husband is immovable and you end up in court? In this scenario, the judicial goal may be the same – equitable distribution – unless, for example, the business is the primary marital asset and selling it is the only option.
Bottom line – if you and your husband are business partners and soon-to-be-ex-life partners, you do have options. If you have questions about the impact your divorce may have on your jointly-owned business, let’s talk. I’m Dan Stock and you can reach me at 475-232-4105 or email me at firstname.lastname@example.org for a confidential consultation to discuss the negotiation of marital assets, your divorce, separation, custody, child support, alimony, or property division issues.