Can you still be co-owners of a family business after divorce?

On Behalf of | Feb 23, 2024 | Divorce

When couples own a family business, they are often co-owners. Both spouses may have their own individual roles within the business, but they work together. For instance, a couple may own a restaurant where one spouse is the head chef and the other spouse handles the employees and the financial decisions.

If they get divorced, these couples have to decide what to do with their business. They are dividing assets, so one option is certainly to sell that business and split up the money. In other cases, one spouse will buy out the other person’s share in the business and take over as the sole owner.

But if both people are heavily involved with the business, they know they both may be necessary for its continued operation. Financially, it is best for them if they both stay at the company, despite their marital status. Can they keep being co-owners after they get divorced?

There is no legal prohibition against it

This is certainly an option that people have. There is no law saying that a divorcing couple has to sell their business. All they have to do is divide assets. But the business doesn’t have to change if they both just agree to be co-owners moving forward. It is already owned jointly.

What does have to change is the couple’s relationship. Since they are getting divorced, it may be wise for them to draft a partnership agreement. This can define the new relationship to help things go smoothly.

A complex divorce

A family business is one of many things that can make a divorce case more complex. It’s important to understand all of the legal steps to take at this time.

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