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The fate of the business — a major a focus in your divorce

On Behalf of | Mar 11, 2020 | Divorce |

If you and your spouse have decided to end your marriage, one of your main concerns will be the fate of the business you built together.

You have three primary options to consider when you enter the property division stage of your divorce proceedings.

Put the business on the market

For a divorcing couple, probably the most obvious course of action is to sell the business outright. To do so, however, you will need an appraisal to establish a fair market value. The valuation should develop from information about assets and debts, cash flow, profitability, customer base and other pertinent factors.

If you decide to put the business on the market, remember that it may not sell right away, in which case you and your soon-to-be-ex may have to work together for longer than you planned. However, when it does sell, the two of you can split the profit.

Buy out the other spouse

If one of you is more invested in the heart and soul of the business and wants to continue operating it, the next option to consider is a buyout. Here again, you must establish a fair market value. If the spouse who keeps the business does not have sufficient funds for the buyout, other assets come into play. To achieve equitable division, the spouse who sells his or her share of the company will likely receive the greater portion of those assets.

Continue owning the business together

The fact that the two of you worked hard to build a successful company may outweigh other considerations. You may feel that the business will not continue to thrive unless both of you are involved. After thinking over the options carefully, you and your spouse may decide that you can still get along as business partners in spite of the divorce. If so, this could be the most appropriate choice for your situation.

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