How Hard is it to Divorce a Business Partner?
While divorcing your business partner is challenging, we offer some tips to guide you through the process.
Texas is dominated by small businesses, many of which are family operations. Spouses in these families are often business partners who may have worked together for years building their company and their clientele. Unfortunately, these couples are just as likely as any other to end up in divorce court. When they do, these cases can present some unique hurdles. If you are filing for divorce from a business partner, the same laws apply as in other divorce cases. However, maintaining your business and deciding how it will function in the future are likely to be your biggest challenges.
Deciding What Will Become of Your Business
When spouses who are business partners decide to file for a divorce, one of the biggest issues is deciding what will happen with their company. Under the Texas Statutes, any property that is earned or acquired over the course of your marriage is considered as equally belonging to both and will need to be divided during divorce proceedings. This includes your business. In this situation, you have three basic options:
- One of the spouses buys out the other or trades assets or other marital property for the partner’s share;
- You sell the business, divide whatever money is left, and part ways;
- You continue to operate the business as partners, even after your divorce is finalized.
The third option is the least common, but there are couples who can make it work. There is a greater likelihood of either buying out your spouse or selling and starting over completely. In either of these scenarios, it is important to get an accurate valuation of your business. You want to pay close attention to its current value and what it is likely to be worth in the future before agreeing to any settlements.
Maintaining Your Business During Divorce Proceedings
Being a co-owner of a business with your spouse is likely to make getting a divorce a more difficult process. Negotiations and attending to technical details can be time-consuming, but maintaining your business needs to remain a priority.
According to the U.S. Small Business Administration, close to five million people work for small, private employers in Texas. For the sake of both your profits and your employees, follow these tips to reduce potential conflicts:
- Avoid dragging your customers or workers into personal disputes with your spouse or asking them to take sides.
- Learn to compartmentalize and keep your mind off the divorce and focused on business during working hours.
- Avoid taking actions that could hurt your business as a way of getting back at your spouse.
- Realize that how you handle this situation will likely impact your business reputation in the future.
Get Our Pearland, TX Divorce Attorney on Your Side
When dealing with divorce-related issues that could impact your current rights to businesses and your future financial security, get attorney John Powell, III on your side. To request a consultation, call or contact our Pearland, TX divorce attorney online today.