In 2007, the Census Bureau estimated that approximately 3.7 million businesses were co-owned by spouses, and as more people start their own businesses, that number has likely only gone up. That’s great if couples can successfully work together, but what if you get divorced? Can the business survive? Do one or both of you need to start looking for another job in addition to dealing with the emotional pain of divorce?
Every relationship is unique, and that’s as true of business relationships as it is of personal relationships. Some couples can continue to work together even after they’ve divorced, while others simply have to go their separate ways. Whichever path you choose, here’s what you need to know:
1) Put it in writing.
Most business partners sign an agreement when they start working together that outlines what happens if they want to go their separate ways. But because business ventures between spouses tend to be less formal, they often don’t sign such an agreement and that’s their first mistake. If you don’t already have a written agreement with your partner, write one up and sign it ASAP.
2) Get an attorney who has experience in handling business division along with divorce.
There are attorneys who practice preventing and resolving business disputes and attorneys who practice divorce, but an attorney who practices one is not necessarily experienced in the other. In order to make sure all your assets and interests are protected, make sure you get an attorney you know is capable of handling all aspects of the division of assets.
3) Maintain accurate records.
Your business is one of your assets, so you want to make sure you and your partner can accurately determine its worth when it comes time to divide your property. If you decide the business needs to be sold as part of the divorce, it’s not in anyone’s best interests to sell the business for less than it’s worth. In order to avoid a situation in which one or both of you gets cheated, it is necessary to maintain accurate records from the beginning. Know how much you have each invested in the business, and how much income the business has generated, and it will make the process of splitting and/or selling the business much easier.
4) Talk to your employees.
Much like children, employees might feel betrayed and/or take sides in a divorce. If they hear their bosses are getting divorced (especially if they hear it from someone else) they may worry about their job security.
To avoid confusion and potentially messy situations, couples should agree on a story they can tell their employees, and, whenever possible, they should be the ones to break the news. Some people may feel uncomfortable sharing such a personal experience with the people in their office, but doing so will ultimately make for a more comfortable and trusting work environment. That said, the decision is yours to make and no one will make you do anything you’re not comfortable with.
If you do decide to continue working together after the divorce, it might help to know that there are couples who have made it work. They have said mutual respect is necessary, and that the first two years are the most difficult. After that it gets easier.
The attorneys at Sherer Law Offices have been providing legal representation for divorce cases for more than 20 years. Our experienced divorce attorneys will take the time to really listen to your unique situation so that they can plan strategies that can best protect your best interests.