Starting a family-owned business can be a very exciting proposition. After all, when a married couple has a solid idea and strong motivation, they can build a business relationship alongside their personal relationship. Of course, marriages may not always succeed in the same way as a business idea. In fact, financial issues are often the reason why couples decide to divorce.
As small business owners prepare to complete their divorce, there might be a lot of anxiety about how business assets will be handled. This feeling is understandable, given how much time and effort people put into their homegrown businesses. The important thing to know is that divorce doesn’t have to equate to the end of a business — or even a business partnership.
A report from National Public Radio presents instances in which married couples have decided to end their marriage, but still manage to work together in a business setting. After all, people might be able to bond over their business successes, but may simply not have the same marital chemistry. If couples know that they can successfully maintain a business after divorce, their settlement can be made to reflect that arrangement.
At the same time, other couples might realize that maintaining a professional relationship may be impossible after divorce. If this is the case, marital business assets will have to be divided according to California’s property division laws. Keeping this in mind, assets acquired during the course of a marriage are subject to being divided equally. As a result, the spouse who plans to maintain ownership will likely have to buy the other out of his or her half of the business.
It’s not surprising that handling a small business during property division can be a challenging and sensitive task. As such, business owners going through divorce should know that they don’t have to complete the process alone.
Source: National Public Radio, “When Divorce Leads To A Happily Ever After For A Small Business,” Yuki Noguchi, April 17, 2014