It’s estimated that 3.7 million U.S. businesses are owned by a married couple. If you are planning to divorce, you likely wonder what will happen to your business.
One factor that impacts the outcome is the role of each spouse in the business. For example, the involvement levels of each spouse will likely be considered to determine the outcome. Here are some possibilities:
Buying out the business
In some situations, one person will be bought out of the business while the other retains ownership. An example of this is if one spouse is a dentist or doctor while the other runs the office. In this case, the office work could be easily outsourced, but the professional services could not. The spouse who runs the office would have their share of the business bought out.
Getting an accurate valuation of the business’s worth is essential if you decide to buy out your spouse’s share (or sell your share). Determining the business’s earning power now is simple but determining what it will be in the future is more challenging. The most difficult part of a buyout is determining the best price.
Running the business together
Some couples may consider staying in business together after the divorce. You have to consider if this is a good option for your situation. If you and your spouse are constantly fighting or have a strained relationship, selling or having one person bought out will likely be the best option.
Protecting your rights during a divorce
The biggest obstacle of dealing with a couple-owned business in a divorce is determining a fair buyout price. Knowing your legal options and working with other experts to ensure you get a fair monetary value is best.