Life is full of milestones. You may get married, have children and perhaps even start your own small business with your spouse. Not every marriage is meant to last, however, and some small business owners may find themselves facing divorce. When this happens, decisions will have to be made about what to do with the family business.
Choice one: one spouse keeps the business
One option is for one spouse to keep the business and buy out the other spouse’s share in it. A buy-out can take one of several forms. One spouse can keep the business in exchange for like-valued assets in the property division process. Another option is for the spouse keeping the business to use liquid assets to buy out their spouse’s share in the business. Finally, the spouse keeping the business can buy out the other spouse’s share in the business through refinancing or obtaining a loan.
Choice two: neither spouse keeps the business
Sometimes neither spouse can afford a buy-out or neither spouse wishes to continue owning the business post-divorce. When this happens, the spouses may choose to sell the business and split the proceeds of the sale. While this option allows the spouses to have a clean break from one another it still requires a certain amount of cooperation as a sales price will need to be agreed upon and decisions must be made regarding how to run the business until it is sold.
Choice three: both spouses keep the business
Perhaps the rarest choice is for both spouses to continue co-owning the business post-divorce. Doing so requires a significant amount of cooperation and communication. Each spouse will need to clearly define what their role in the business is to avoid conflict. If a divorce is amicable then keeping the family business can be a lucrative endeavor for both spouses.
Learn more about property division in a divorce
Property division can be a significant part of any divorce in Georgia. Those in the Atlanta metro area who are facing divorce will want to learn more about their rights and options. This post is for educational purposes only and does not contain legal advice. Our firm’s webpage on equitable property division may be of interest to those who want to learn more about this topic.
