What are the options when small business owners divorce?

On Behalf of | Mar 2, 2017 | Divorce

Whether your New Jersey business existed before you got married or you and your spouse built it together, what happens to it after a divorce is likely of great concern. After you have poured countless hours, dollars and effort into creating a successful business, the idea of parting with it may not seem very attractive. If you and your spouse are headed for a divorce, there a few different options to consider when it comes to your small business.

Couples split up for many different reasons. Some breakups are bitter and contentious, while others are amicable. If you and your ex-spouse continue to be on friendly terms, the easiest and least dramatic option, according to Market Watch, is to continue running the business together. Both of you could remain owners and there would be virtually no change in the way that the company operates.

However, for many couples that is just not realistic. Another option would be to sell the business and split the profits down the middle. This would give you some capital and you could potentially start over with a new business if you wanted. In addition, if you are no longer able to continue on together as owners, one of you could buy the other out. If the cash does not exist to do this, the person retaining the business may have to take on debt to complete the sale.

For both sale options, a complete valuation of the business and all of its assets will need to be done. Should you decide to remarry at some point in the future, you may want consider a prenuptial agreement or other written document that will cover a possible future divorce as it relates to your business. This is provided as general information on this topic and should not be considered legal advice.