If you own a business with your spouse, it may feel like you have to go through a divorce twice — first as spouses, then as business partners. Starting and running a business takes time and money, but what can you do if you can no longer work with your ex-spouse?
In Texas, you can divide your property into separate and community property.
Who owns the company?
Most business owners do not want to sell the business and split the profits. Not to mention, it becomes more complex if you have other owners involved. Are you and your spouse the only owners? Are there other shareholders to consider?
Next, you have to determine whether you or your spouse has more of an interest in the company. If you started the business together, the business is community property. Even if one of you started it outside of the marriage, if the other contributes to it, it still belongs to both of you.
What is your business’s value?
Determine the value of your business. A proper valuation will help you when it comes to equitable asset division. When you have the company’s value, you have to decide what you and your spouse want to do with it. Some options include:
- Buying out one spouse’s share in the company
- Selling the company and dividing the remaining assets
- Divide the business into two different companies
- Continue the business as co-owners
Without the value of the business, none of the options will be fair for either party.
While you have various options for dividing the business, you always need a strict asset division plan.