For some married individuals, their spouse is not only their partner in marriage, but also their business partner. There are many married couples that own and run businesses together. According to federal government estimates, the number of businesses here in the U.S. that husbands and wives jointly own is around 3.7 million.
Now, jointly owning a business can raise some additional issues for a couple if they decide to divorce. One of the big issues is what to do now with the business.
There are several different avenues a divorcing couple could take in regards to a jointly-owned business.
One is to continue to hold joint ownership of the business and to try to continue to run the business together after the divorce. It is worth noting though that, for quite a few divorcing couples (particularly those whose divorces are very contentious) this option might not be a realistic and workable one.
Another option is to just have one of the divorcing spouses keep the business, with this divorcing spouse making a payment to the other to “buy them out” of the business. When this option is chosen, determining the business’ value can be an important issue.
Yet another option is to sell off the business, and then divide out the proceeds.
What way of dealing with a jointly-owned business in a divorce is most appropriate for a given divorcing couple can depend on a plethora of things, including: how contentious things are between the two divorcing spouses, what roles the two play in the business and what type of business the business is. Divorce attorneys can provide divorcing individuals with guidance when it comes to issues regarding a jointly-owned business in a divorce.
Source: CBS Money Watch, “Who holds onto the family business when couples divorce?,” S.Z. Berg, Feb. 10, 2015