If you and your spouse are facing divorce, your family business will likely be the focal point in the property division phase of proceedings.
There are three basic options to consider, two of which require establishing a valuation for your business. Consider the pros and cons of each option before making a decision.
1. Sell your business
Selling the business is perhaps the most obvious choice. You and your soon-to-be-ex could split the profits and move on to other ventures. You must first arrive at an appropriate price. To do this, you will need to have an appraiser perform a valuation. Once done, you can put the company on the market. Keep in mind that the sale may take a while and, while you wait, you and your spouse may have to continue working together.
2. Buy your spouse out
You will also need the results of the valuation if you decide to buy your spouse’s share of the business. If you devoted considerable time and effort into building the company, and it is really your “baby,” this may be the option you find most attractive. Of course, you must put together the funds for the buyout. If this is not possible, you could consider offering an asset to your spouse that is equal to the value of half the business.
3. Continue as partners
The third option is to continue owning and operating the business together. On the positive side, performing a valuation would not be necessary, which would save you considerable expense. Also, you would both keep your interest in the business. However, keeping the company also means that you and your spouse would go on working together as partners. If your divorce is amicable and you believe the two of you could maintain a working relationship that is genial and in the best interests of the company, this may be the perfect solution.
As you approach the property division stage of the divorce process, rely on legal guidance to assist you in considering the many decisions you have to make, not the least of which concerns the fate of the family business.