When you’re going through a divorce and have a business with your spouse, one thing that you have to do is to discuss dividing your business. Your spouse might be keen to keep the business, but if you don’t want to play a role in it any longer, you may feel like selling is the better option.
If you don’t want to keep the family business, you are generally limited to selling it or allowing your spouse to buy out your share. You may exchange other assets for your share of the business. You may also be able to sell just your share in the business if your spouse agrees to that.
This can be complicated, which is why you need to take a few steps to get out of owning the family business.
Step 1: Make it clear that you don’t want to be involved
To start with, you do need to tell your spouse that you’re not interested in working in the family business anymore. Make it clear that you do not want to continue participating in any way, so they don’t feel that you’ll be working together even after you separate.
Step 2: Discuss options for buying out the share
Next, you should talk to your spouse about how to divide the business. If you’re planning to split the business 50-50, for example, you’ll need the valuation to determine what your half is worth. Then, you’ll need to discuss if you should sell the whole business, sell just your share or allow your spouse to buy out your share with other assets or cash.
Step 3: Sign the right legal documents to release yourself from liability
Once you know what you want to do, you should sign the right documents to release yourself from liability with the company. Signing over the company is a big step whether you sell your share or just sign it over to your spouse. Wait to do this until you have the all-clear from your attorney or the court.
When you don’t want to keep a business, it’s reasonable to bow out. You should, however, make sure that you are getting a fair share of the business because it is a result of your hard work.