A California business that you own in partnership with your spouse represents the intersection where family law meets business law. Divorce is never easy, but when a business transaction becomes part of the proceedings, we at The Law Firm of Lan Quoc Nguyen & Associates believe that the matter can become even more complicated.
Forbes Magazine has investigated the matter and describes three possible courses of action by which a divorcing couple may handle their family business. Though hypothetical discussion of divorce may be uncomfortable, it may make good business sense to plan for the contingency by considering the following options even if you do not anticipate divorcing.
Selling the business
You and your spouse may choose to dispose of the business by selling it to someone else and splitting the profits from the sale. The downside of this is that you and your spouse may be stuck working together on a temporary basis if it takes a while to attract an interested buyer. To determine an appropriate selling price, you should also have an appraiser conduct a valuation.
Buying out your ex-spouse
This can be a tricky matter if both you and your spouse want to stay in business or if you do not have the funds immediately available to purchase your spouse's half. The first step in the process is a valuation by a business appraiser so that you know for sure what each half is worth.
Continuing your business relationship with your ex-spouse
If your split is not amicable, this may not be an option, but some couples may be able to put aside personal differences after a divorce and continue their business partnership. If you can trust your ex-spouse to do what is best for the business, and if the two of you can maintain a good working relationship, continuing the business allows you to save the expense of hiring an appraiser for a valuation, and neither of you has to sell your portion of the business.
The correct option for you will depend a great deal upon your individual situation. More information about business transactions is available on our website.