Couples who build a business together invest a significant amount of time and money in their business. The relationship and partnership in your business can also lead you to invest a lot of emotions in the company as well.
This can make it incredibly complex to divide business assets if you decide to divorce. Dividing business assets in a divorce is often difficult. Many spouses strive to keep the business they worked so hard for intact. This leads many to wonder if they can maintain the business and remain business partners, even through a divorce.
The family business is often subject to property division
Every business is different, which makes dividing them complex. Some business assets might be separate property, while others might be marital property if spouses built them together. Any business assets considered marital property are subject to equitable distribution in Colorado.
This requires spouses to value their business assets and divide them equitably. Therefore, as Forbes outlines, spouses generally have three options:
- They can sell the business and divide the profits equitably;
- One spouse keeps the business and buys out the other spouse’s share; or
- Both spouses continue to share ownership of the business.
The divorce aside, most business owners will strive to preserve their business. That is why many individuals might wonder if option number three is possible.
Is it possible to continue running a business together after divorce?
The answer to that question heavily depends on your situation. If spouses have trouble setting aside their emotions over the divorce, maintaining a business partnership might pose a significant challenge.
However, several spouses have successfully continued their business, even after a divorce. Yet, Entrepreneur Magazine found that these divorced business partners shared many things in common, including:
- They have a significant amount of trust in each other, even after a divorce;
- They create specific boundaries between business and personal life; and
- They obtain legal help from a third party to mediate issues.
It is not impossible to run a business with an ex-spouse, but you will have to be prepared for the challenges it brings. In these cases, it is beneficial to create an operating agreement to ensure that both you and your ex-spouse place the business’s best interests first, no matter what.