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How your divorce can impact your business

On Behalf of | Jan 14, 2022 | Divorce

Getting a divorce can be a complicated process that takes months or longer to finally resolve. Hundreds of thousands of people get divorced every year, but the most complicated divorces come from high-asset situations, often ones with businesses involved. A business can experience a number of different outcomes in a divorce, and in order for someone to protect their best interests in their divorce, they should know what to expect for their company; here is what you could expect for your business in your divorce:

Buyout

If one spouse is willing to part with their stake in the company, they can opt to allow their spouse to buy their share. In order to receive a fair value for the sale, it is beneficial for both parties to get an accurate valuation of the company before negotiating over a reasonable purchase price. Instead of an exchange of money, a spouse may leverage their share of the business for another asset, like the family home.

Co-ownership

If both spouses cannot agree over a buyout or agree to keeping their share, they may process with co-ownership of the company. While the ownership may continue as it did before the divorce, the dynamic of ownership may change. For example, one spouse may decide to take a silent role in the ownership and opt to collect their share of income while allowing the other spouse to operate the business for the both of them.

Total sale

Sometimes, neither spouse can come to an agreement about owning the company together or one spouse buying ownership from the other. After a fair valuation of the business, the spouses may sell the company entirely and split the income according to the divorce decree.

Prepare for the outcome you want

The fate of your company is not entirely up to chance. By consulting with your divorce attorney, they can help you develop a negotiation strategy to pursue your desired outcome. Also, by remaining flexible with your goals, you can prioritize your goals to earn the best possible outcome in your divorce while sacrificing as little as possible in the process.