Going through a divorce presents unique challenges when you own a business with your spouse. One or both of you may actively work in the daily operations, or you may have all of your cash tied up in your endeavors.
Before you agree to what will happen to the company, you must consider many aspects. There are various possibilities, depending on your needs, goals and circumstances.
Sell your business
If you and your spouse decide to sell, you must first get a business valuation. This process looks at your company’s financial records, projected revenue and expenses to provide a fair market value. Once someone buys the entity, the courts divide the cash fairly under Georgia’s equitable distribution laws.
Buy out your spouse
You may choose to purchase your partner’s shares in the business. This option allows you to maintain your ownership and your livelihood. You can agree to pay the total cost over time through installments or pay the full amount at once.
Trade for other assets
If you want to keep your business after your divorce, consider trading other marital property for sole ownership of your business. For example, your spouse may agree to trade shares in the company for the house or retirement accounts.
Create a new partnership agreement
If you feel that you and your partner can run your business together following your divorce, draft a more arms-length operational arrangement. Outline the specifics of your professional relationship with complete transparency and plans for handling potential issues.
Finding a divorce settlement that meets your needs when you own a business with your spouse can be challenging. Consider how the options work with your plans to determine your course of action.