In some cases, partners have entered into business with one another before differences have caused them to seek a way to end their personal relationship or marriage. When this happens, the business must be managed in a fair and equitable way so that the rights and interests of both parties are respected.
Read on to see the options you have on your table for finding a solution to your concerns:
1. Continue to Own the Business Together
Naturally, this option depends on the circumstances of the divorce. If the split was amicable and a function of necessity rather than distrust, it is possible for you to continue to own a business with your ex. Out of all the options presented, this will certainly be both the easiest and quickest option to take; although it is extremely rare. However, marriages that end with partners on disagreeable terms with one another will need to consider another option in order to change the manner in which the business is owned.
2. Get a Valuation of the Business
By getting a proper valuation of the business, you and your partner will be able to determine what exactly is at stake. With a firm number in mind, you and your partner have the option to negotiate. This gives the opportunity for one to buy the ownership interest of the other, or to arrange an agreeable transfer of other assets in exchange of the business interest. To do so, parties are encouraged to retain a Certified Business Valuator (CBV).
3. Sell the Business and Split the Profits
If you and your partner can’t agree on how to split the business evenly and aren’t interested in continuing to work together, a third option is to sell the business entirely and then share the profits. This makes the necessary calculations of assets during the divorce process much easier. The obvious drawback to this approach is that you and your partner may need to find a new way to replace your income. You may also be unwilling to so quickly part with a business that is still growing and has a lot of potential. This is also difficult where one party owned the business before the relationship.
For professional consultation on how to be manage the future of your business as you go through divorce proceedings, or before entering the business relationship, get in contact with the legal team at Epstein & Associates. We can review your opportunities and provide expert judgment on the best course of action. Call us today to arrange a free initial consultation.