Divorce When You Own a Business Together: Navigating the Challenges

Divorce can be a complex and emotionally challenging process, especially when you and your spouse own a business together. Untangling the personal and professional aspects of your relationship requires careful consideration and planning. Here, we will explore some common questions and provide answers to help you navigate divorce when you own a business together.

1. What happens to our business during divorce?
One of the most critical steps is to determine the value of the business. This can be done through a professional valuation. Depending on the circumstances, you may need to sell the business, buy out your spouse’s share, or continue running it jointly.

2. Can we continue running the business together after divorce?
Continuing to operate the business together can be challenging, as it may lead to ongoing conflict. However, if you can maintain a professional relationship, establish clear boundaries, and separate personal issues from business matters, it is possible.

3. What if my spouse wants to take over the business?
If your spouse desires to take full ownership of the business, you can negotiate an agreement that stipulates how the buyout will occur. This may involve determining a fair value and establishing a payment plan.

4. How can we protect the business during divorce proceedings?
To safeguard the business, you can consider drafting a shareholder or partnership agreement that includes provisions for divorce situations. These agreements can outline how the business will be handled in the event of a breakup.

5. Can I prevent my spouse from accessing business assets during divorce?
To prevent your spouse from accessing business assets, you can seek a temporary restraining order or freeze the business’s accounts. Consulting with an attorney experienced in divorce and business law is crucial to ensure you take the appropriate legal steps.

6. What happens if we can’t agree on the business’s value?
If you and your spouse cannot agree on the business’s value, you may need to involve a neutral third-party, such as a forensic accountant or business appraiser, to provide an unbiased valuation.

7. Can I use business funds for personal expenses during divorce?
Using business funds for personal expenses during divorce proceedings can have legal consequences. It is essential to consult with your attorney to understand the legal and financial implications of such actions.

8. What if we have employees who are not involved in the divorce?
The impact on employees can be significant during a divorce involving a business. It is essential to communicate with your employees openly and honestly, reassuring them about the future of the business and their roles within it.

9. How long does the divorce process usually take?
The duration of the divorce process varies depending on the complexity of the case and the willingness of both parties to cooperate. On average, it can take anywhere from several months to a year or more to finalize a divorce involving a jointly owned business.

Divorcing when you own a business together requires careful planning, effective communication, and professional guidance. Working with experienced attorneys, accountants, and business advisors can help ensure the best outcome for both your personal and professional lives. Remember, every situation is unique, so seeking personalized advice is crucial to protect your business and secure your future.