Owning a family business is a good experience, but it may become a problem if the owners decide to end their marriage. This decision affects the business and the owners.
Determining the best way to proceed with this situation is a priority. You should consider a few things if you’re a business owner ending your marriage.
#1: Options for the fate of the business
There are several options for the fate of the business. The company may remain operational. In this case, either both spouses would continue joint ownership or one spouse could buy the other one out. The other option is that the business is either closed or sold. Regardless of what happens with the company, the plan and terms should be clearly documented in writing.
#2: Discussions with staff members
It’s best to let employees know what’s going on, especially if there will be changes in how the company operates. They may have already realized that something is going on, so talking to them about the situation may put them at ease. This can also give them the confidence to help your customers feel better about continuing to do business with the company.
#3: Hidden business assets are problematic
Sudden income deficit syndrome occurs when one business owner knows about the finances of the company and the other doesn’t. The spouse who knows what’s going on may try to change the financial records to make it appear as though the company isn’t as profitable as it truly is. This is an issue because it can have a profound impact on the property division settlement. Working with a forensic accountant who can review the transactions and other information might be necessary to determine if there’s anything amiss.
Going through a divorce is a challenge for everyone, but it’s much more complex for business owners. Taking the time to learn about your options and reviewing how they may impact your future may help you to make decisions that are in your best interests. Working with someone who’s familiar with business owner divorces is also beneficial.