Married couples in New Jersey may own a successful and profitable business together. However, their marriage may not have been as successful as their business, and they may make the decision to divorce. When this happens, they have several options for handling the division of the family business in a divorce.
Option one: one spouse keeps the business
If one spouse wants to keep the business and the other spouse does not, the spouse keeping the business can buy out the other spouse’s share in the business. This can be done either with liquid assets or by obtaining a loan. If both spouses are willing, a structured property settlement that allows the spouse keeping the business to make a series of payments rather than one lump-sum may be possible.
Option two: both spouses sell the business
Sometimes both spouses simply want a clean break from one another so they can move forward into new ventures. When this happens, they may be interested in selling the business and splitting the proceeds. It is important to keep in mind that the sale of a business can take time, due to market conditions, the profitability of the business and the economy as a whole. Spouses will have to agree on how to run the business until a buyer is found and the sale is complete.
Option three: both spouses keep the business
While it may seem like an unlikely scenario, sometimes divorcing business owners choose to keep running the business together. This requires couples to be communicative and cooperative with one another, which can be difficult for some post-divorce. It can help to execute a business plan outlining each spouse’s role in the business following the divorce.
Learn more about dividing a business in event of a divorce
Divorcing business owners have many important decisions to make with regards to the future of their business once the dissolution is complete. This post is for educational purposes only and does not contain legal advice. Our firm’s webpage on business law may be of use to those looking to split or sell a family business following a divorce.