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Do you have to sell your business if you get divorced?

On Behalf of | Nov 9, 2023 | Divorce |

In many cases, family businesses are run by spouses. They may have decided to start a company before, as business partners, and later fallen in love and gotten married. Or they may have gotten married first and then decided to go into business together so that they could both quit their other jobs and create their own career.

But no matter which way it happened, these people may be worried about what happens to their business if they get divorced. If you find yourself in this position, does it mean you’re going to have to sell your business? After all, you and your spouse do have to divide the assets that you own, and the business is probably the most expensive asset that you have. Is selling it the only option so that you can divide the proceeds?

You can sell half of the business

There are actually some other options. First and foremost, you could sell your half of the business to your spouse. Say that you are more interested in getting your money out of the company and moving on with your life, but your spouse sees the business as their livelihood and something they want to continue doing until they retire. They could get a business loan or they could give you other marital assets – such as a family home or something with a similar value to the business – and they can buy your half of the company from you. They then take over as the sole owner, while you take your half of the money and move on.

You can keep working together

Another option is just to continue to work together after the divorce. You and your spouse do not have to be married to be business owners. In the hypothetical example above, the whole relationship may have started when you were business partners and not a married couple. You can shift back to that, although it’s very important to use a partnership agreement and define your specific roles, responsibilities, rights, obligations and other such details. 

Of course, some couples also find it too difficult to work together after they split up, so this won’t work for everyone. As you can see, though, there are definitely options to consider and it’s very important to look into them carefully during the legal process.