Many family businesses are owned jointly by multiple family members, such as a married couple. They work together to run the business, and they may have different roles. At a small restaurant, for example, one spouse may do most of the cooking, while the other handles personnel and paperwork.
But what happens when that couple decides to get divorced? Because they are joint business owners, what do they do with their business during asset division?
3 main options
Couples in this position have three general options. The first is for them to sell the business. Because they both own it, selling converts it into a cash asset, which they can then split up during property division.
The second option is for one person to buy out the other’s share. This transfers full ownership to one spouse, who gets to keep the business after the divorce. But it can be complex to buy out the other person’s share, and they may have to consider giving up other marital assets.
A final option is for the couple to keep working together. This does not often work in high-conflict divorce cases, but it can be a viable solution during an amicable divorce. A couple may want to write a partnership agreement or otherwise redefine their business relationship, but then they do not have to sell the business at all. They can still work together, even after their marriage has come to a close.
Navigating a complicated divorce
Getting divorced as joint business owners can certainly be a bit complex. With valuable assets on the line, it is important for couples to understand all of their legal options.