No one can deny that running a business is difficult. It can be significantly more difficult, however, if your business partner is your ex-spouse. Nevertheless, couples with family owned businesses divorce every day. While it's generally known that professional affairs can become complicated when mixed with family issues, , sometimes there may not be a way around it. The following is a look at divorce and the family business, and some tips for Minnesotans facing this divorce related issue.
Nearly 4 million businesses are owned and operated by married couples. Considering the high divorce rate in the United States, it is not surprising that the issue of operating a family business with an ex-spouse is fairly common. Because of this, experienced family law attorneys typically have the knowledge and experience to handle the most common issues that arise when business partners divorce.
In addition to navigating the legal effects divorce can have on a business, however, there are also very important human considerations that need to be addressed to determine what will be done with the family business in divorce. For one thing, it is important to ask whether or not either party wants to continue. Although some couples find ways to continue operating their business together after divorce, that may not be a viable option for every couple.
If a couple feels that working together will be too difficult, an attorney can help dissolve the business in addition to the marriage. This can involve liquidating the business assets and dividing the proceeds in a lump-sum buyout. Ideally, spouses create a shareholder's agreement when they form their business that details what happens if someone wants to sell. Though a shareholder's or prenuptial agreement could ease divorce negotiations, it is possible to finalize business plans at the time of divorce.
Source: New York Times, "When Couples Divorce But Still Run A Business Together," Bryan Borzykowski, Dec. 5, 2012
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