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When dissolving a marriage also means dissolving a business

On Behalf of | Apr 17, 2015 | Business Formation And Planning |

When a couple that owns a business together decides to dissolve their marriage, they face a difficult decision over whether their business should be dissolved as well.

The good news is that business owners facing marriage and business dissolution have several options, as we explained at length in an article on our website. 

The most important first step to take is meeting with a divorce lawyer who also has experience in business law. An attorney who is well-versed in family law and business law will likely tell the couple that they have three main options when it comes to their business:

1. The spouses keep the business as is and continue operating the business together in their current roles.

2. One spouse buys out the other spouse’s interest in the business with cash or alimony payments.

3. The spouses sell the business together, split the profits, and then go their separate ways in life and in business.

It is up to the divorcing couple whether they want to continue to operate their business together after their marriage ends, but many people in this situation decide that would not be a viable option, so the second and third choices are most common.

Ultimately, the best choice will depend on the individuals involved, their ability to remain working together and their attachment to their business.

If the divorcing couple decides that business dissolution is the best option, they must be careful to make sure each spouse is getting his or her fair share of the business, which can be a difficult task if the couple never created a business dissolution agreement at the onset.

Even if the divorcing couple plans to stay in business together, it will be necessary to create an exit strategy for if the plan doesn’t work. For all of these reasons, it is essential to work with a family law attorney who also has experience in business law