You and your spouse may have spent years cultivating a successful family business. However, your marriage may not be as successful, leading to the difficult decision to divorce. It is important that people in the Myrtle Beach area in situations like this understand what options they have for their family business in a divorce.
One option is for one spouse to keep the business and buy out their ex’s share in the business. Keep in mind that if the business requires a professional license, only the licensed spouse can keep the business following a divorce. It is also important to keep in mind that there may be tax consequences associated with a buy-out if the business is sold to a third party later down the road.
In addition, a buy-out requires the spouse keeping the business to have enough cash or liquid assets to afford the buy-out. If not, they may have to obtain a loan to accomplish a buy-out or there may need to be the exchange of assets of an equivalent value in the property division process.
Selling the family business
If neither spouse wants to keep the business or if a buy-out is not possible, the parties to the divorce may agree to sell the business and split the proceeds. Keep in mind that this is generally only possible if there is a court order permitting it and neither spouse wants to continue the business. Selling the business can also take time, and the spouses will need to cooperate to agree on the value of the business, the sales price and who will be purchasing the business.
Staying on as co-owners
In certain circumstances, neither spouse wants to relinquish the family business. While it is rare, these couples may find that they are able to keep running the business as co-owners following their divorce. Doing so entails a great deal of cooperation as both parties carve out their new roles in the business. In addition, it ties a couple together with the common interest of running the business even after the divorce is final. However, if a couple’s split is amicable and the spouses are cordial with one another, keeping on as co-owners may be an option worth considering.
Attorneys in Conway can advise on property division
Ultimately, this post only provides information on what to do with a family business in the event of a divorce. There may be options not discussed here, and this post does not contain legal advice pertaining to any specific situation. Those in the Myrtle Beach area who have questions about property division and their family business may want to seek the advice of an attorney before moving forward.