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What if you own a business with the person you are divorcing?

On Behalf of | Apr 14, 2024 | Business Law, Family Law

Relationships do not always work out. It’s one of the reasons people often advise to never mix business and pleasure. Differences at work could harm your personal relationship, and differences at home could harm your working relationship. That said, sometimes going into business with your spouse is a natural, and can work great.

If your marriage reaches its end, you’ll need to think about how that will affect your business. Here are some things to consider:

Can you still work together, and do you want to?

Some ex-spouses still manage to work superbly together. They may even run the business than when they were married. It can be tough, but so can finding someone to replace the knowledge and skills you each bring to the business.

If you wish to continue working together, you should revise your business documents to make sure the terms of your partnership are clearly defined.

Sometimes, it is better to end your business relationship along with your marriage

If you prefer to separate from each other entirely, you need to think about which of you should stay in the company. Sometimes, that will be obvious, as one of you was far more involved than the other. Or if one owned the business before marrying. Other times, you may need to weigh things up, remembering that a failing business is good for no one.

If you separate, you need to decide how that will play out. How will the party who leaves be compensated? Maybe they will retain shares but just step back from the running of the company. Or maybe the spouse who keeps the company will need to buy them out.

Divorce and business can both be complex, so it’s often wise to get legal help to examine how best to proceed.