For some couples, their marriage is not just about creating a shared life together; it is also about sharing a business. Being married to your business partner can be beneficial when things are going well, but troubles with your marriage may affect your business as well.
The spouse/business partner relationship can become even more complicated if a couple decides to dissolve their marriage. While every divorce will impact different areas of a person’s life, divorcing a business partner has the potential to dramatically alter a person’s livelihood. As such, certain factors should be taken into account.
If a person has invested a large portion of their life to building and operating their own business, it is likely that the longevity of the business will be one of their highest priorities. Because of this, many business owners consider prenuptial agreements before getting married.
A prenuptial agreement is a legal agreement made between both parties before their marriage. It determines how their assets will be divided if they are to divorce. Some couples prefer to have their own respective attorneys to represent them as they write up the document. This can provide them with peace of mind knowing their best interests are being kept in mind.
For business owners, a solid prenuptial agreement could mean the difference between keeping the business they worked so hard to create and losing it as a result of a divorce. However, the chances of a negative outcome in a divorce are lessened if both parties are working together.
If possible, it is highly recommended that couples keep the divorce process as amicable as they possibly can. Amicable divorces often result in better outcomes for both parties, including:
More advantageous division of property
A business relationship that functions well
A display of conflict resolution and problem solving (this is particularly beneficial if the couple has children)
Some couples are incapable of keeping things from becoming adversarial, unfortunately. Regardless, one of the important steps spouses/business partners will have to take if they do divide their business is the process of having their business valued.
Before a business can be divided well, both parties will want to know exactly how much the business as a whole and its respective parts are worth. Some couples are able to value the business on their own; others will employ a neutral third-party firm to do the valuation for them. Either way, both parties will want to agree on the end result before moving forward.
The process of divorce is a complex one on its own, but it becomes even more complicated when there is a business involved. In these situations, solid legal representation and guidance can make all of the difference. If you and/or your spouse are considering a divorce, it is highly recommended that you obtain the services of a knowledgeable and experienced legal professional who specializes in this area of law.