Can Spouses Continue Running A Business Together After A Divorce?
Of the many layers that can add complexity to a divorce, one of the most challenging is when spouses own a business together. Dividing a business is a complicated matter. Simply determining the value of the business can be difficult. Then it must be determined how it will be divided. Will the business be sold and the profits split? Will one spouse buy the other out? What if the business was in one spouse’s family for years?
But what if you are both still committed to the business?
With emotions running on high, there is one option that divorcing spouses who own a business together often fail to consider: continuing to run the business together.
The End Of A Marriage Does Not Have To Mean The End Of A Business Relationship
A recent article from the Business Times tells the story of EO Products, a cosmetics business that has continued to grow in the eight years since the owners got a divorce. The company is now worth $28 million, with the divorced owners now acting as co-CEOs. Even though they are divorced, they are able to maintain a successful business relationship based on qualities like “integrity, honesty, trust and respect.”
While continuing to operate a business together is certainly not going to work in all situations, it is an option worth considering. Here are some questions to ask yourself:
- Do you and your spouse share the same goals for the business?
- Are you both able to view the business as a distinct entity from your marriage?
- Are you both able to work together and communicate clearly and respectfully?
- Is there greater potential for success and profit if you and your spouse continue operating the business together?
If you and your spouse decide to continue running the business together, you will need to determine if and how contracts and documents will need to be updated to reflect the new business relationship. Will there be changes? Should the rights and responsibilities be delineated where they have not been previously? Should existing rights and responsibilities be formalized?
You Do Not Need To Make These Decisions Alone
Making decisions like these can be complex. You cannot predict the future. However, an experienced attorney can make certain no options are overlooked and illuminate potential outcomes that you may not have thought of.
At the Law Office of Kyle Whitaker, we will work with you to ascertain your goals, look at your situation critically and determine the most effective strategy for your divorce and your business. If you choose to divide the business, we are skilled in protecting your interest. If you choose to try to keep the business running with your spouse, we can help you set the stage for success.
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