Business owners must have keen insight into the future. This is important for projecting sales, anticipating the reception of a new product and adjusting your marketing approach, among other reasons. However, many business owners fail to use that insight when it comes to the ways their marriages may affect their business, particularly when the marriages end.
Divorce is certainly not something you expected, and you may have taken a leap of faith and skipped the prenuptial agreement that would have protected your interests during property division. However, even without such protections, you certainly still want to reach a fair settlement with your spouse that also allows you to continue operating your business, if at all possible.
Making the difficult decision
Your business may be one that your family handed down through generations, one that you formed with the help of your spouse or built with your own time and money. Each of these will have its own factors to consider, such as partnership agreements, incorporation documents and succession plans.
Even if your documents describe the operation as an entity separate from your marriage, your spouse’s interest and participation in the financing and running of the company may provide a judge with a convincing argument that your spouse deserves half of your business. In many cases, divorce leaves a business owner with the following options:
- Buyout: This entails obtaining an agreeable valuation of the enterprise and paying your spouse for his or her share.
- Transfer: Your spouse may agree to transfer back to the company any shares received in the divorce, which means the company will have to take a financial hit.
- Split: If your company has several divisions, it may be possible to separate the company into two separate businesses, one for you and one for your spouse.
- Keep going: You and your spouse may be able to continue operating your company as partners, which will allow you to keep receiving an income from the company.
- Sell: This may not be your favorite option, but selling the business and splitting the proceeds may be the best way to achieve a clean break so you can start over fresh.
Whatever you and your spouse decide to do, you would be wise to seek the counsel of a Tennessee attorney skilled in complex property division. Having such an advocate will improve your chances of obtaining a fair settlement.