What happens when your life partner is also your business partner, and then you decide to go separate ways? While this divorce situation can be particularly stressful, the good news is you have options.
Before deciding what to do, the first step is figuring out what your company is worth. You can do this with the help of a third-party appraiser. After that, you and your spouse can choose one of three routes.
1. One spouse takes on ownership
In most business partner divorces, one spouse decides to buy out the other. In doing so, the buyer takes on sole ownership of the company. Since the law considers the property transfer to be an incident of divorce, doing things this way can be tax-efficient.
2. Both spouses continue ownership
While less common, another option you have is to continue sharing the business. Of course, you should not take this option lightly if this is something your are considering. While some couples manage to successfully cooperate after severing romantic ties, others do not. Reflect on your personal goals, and be realistic about what you want.
3. Both spouses sell the business
A third choice divorcing business owners have is to sell the company entirely, with both spouses giving up ownership. While this option can provide each party with the opportunity to pursue future personal endeavors, selling a business can take awhile. As such, learning how to navigate communication to with your spouse in the meantime can help you prepare for the road ahead.
By familiarizing yourself with the different options available, you can make the best decision for you and your business as navigate your divorce.