When you and your spouse started your business, you never dreamed that your marriage would end this way — and now you’re concerned about the company’s future.
Does divorcing always mean that the family business has to be dissolved or that one party has to buy out the other for the business to go on? Not necessarily. There are times when a couple will decide to retain their respective portions of their company. This isn’t right for everyone, but there are some advantages that can make it worthwhile — as long as you remember certain basics.
Teamwork is critical
People who are going to run a company together after a divorce must be able to trust each other. Each person should have clear duties with the company in line with their knowledge and strengths, and those must be spelled out in a partnership agreement. In addition, there needs to be an agreement that clearly says how profits are to be shared, when those profits are to be paid and what other compensation each party will receive.
Address conflict resolution
Eventually, you and your ex-spouse are going to have disagreements over the business. All partners do. It’s important to have an agreement in place that addresses how business conflicts will be resolved. If one of you holds a greater share of the business, does that person have the final say? Should you agree to mediation or arbitration?
One of the hardest parts of working with your ex-spouse is establishing new social boundaries. Your business can suffer if you aren’t both able to take a healthy step back from the other’s private life.
If you and your ex want to continue to run a company together after your marriage ends, it may be possible. Just make certain that you understand the challenges you face ahead and take the appropriate steps to protect your legal interests both privately and professionally.