Hartley Law Office, LLC

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Review of options for business owners going through divorce

Although previous posts on this blog have mentioned, it may be helpful to residents of the Dayton area to be reminded of the options they have with respect to their businesses when a divorce or legal separation is looming. For that matter, this overview may also be helpful to unmarried couples who have been together for a long time and have operated a business together.

In a divorce, a person's share in a business will with few exceptions be subject to property division. The existence of a prenuptial agreement may change this, but in general, a couple is going to have to determine how much the business, or share thereof, is worth at the time of the divorce. The parties or the judge hearing the case will then have to decide how to fairly divide the value.

If neither party wants to continue with the business after the divorce, then the best thing to do may be just to sell the business outright and divide up the proceeds from the sale. But, in many cases, at least one person is going to want or even need to continue operating the business.

In such cases, the person wanting the business is likely going to have to offer a buyout to the other person. As the name implies, the buyout will involve paying the other person his or her fair share of the business's value by some other means, perhaps, by trading off other property or even just taking out a loan and paying cash.

In exchange, the other person will surrender his or her interest in the business. In a few cases, such as when the couple is confident that they can still succeed as business associates, the best option may be just to let the couple continue to run the business together.

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