Experts in the business world often compare business partnerships with marriage. There are common factors that include the ability to communicate, the equal division of duties and the reliance on each other’s strengths. There is also the crushing effect of a breakup that means the end of a business as easily as it ends a marriage.
When the business partner is also your spouse, the damage may be magnified. Married entrepreneurs often find their business at risk when the marriage comes to an end, and you may have the same fear about your company. Whether you established the business long before you met your spouse or the two of you built it together, losing the business in a divorce settlement may be financially and emotionally devastating.
Don’t rush into a decision
If you didn’t have a Buy-sell agreement in place that also provides for buying out another partner’s share of the business in the event of a Divorce, in the early stages of divorce proceedings, it is likely that one of three things may happen by either agreement or by Court order:
- One of you buys out the other partner’s share and continues running the business;
- You sell the business and split the proceeds; or
- The two of you continue working as partners after the divorce (least likely).
Because of the emotional strain you are likely feeling now, making any decisions is not advisable until you have gathered adequate information about your options and obtained sound legal advice.
What should I do now?
For the time being, your primary focus is going to be ensuring that your business remains functional and valuable by avoiding creating feelings of uncertainty and insecurity among your colleagues, employees, vendors, and customers. You can do this in the following ways:
- Do not ask your employees or business associates to take sides in your divorce.
- Do not argue with your spouse about private matters in front of your employees or customers.
- Avoid denigrating your spouse or damaging your spouse’s business reputation.
- Continue to build the business and increase its value by keeping focused on the goals of the company.
- Keep careful financial records for your company.
The continued success of your Texas business may mean a secure financial future for you after your divorce is finalized. Whether you sell the company or continue to operate, the stronger the business is, the stronger your financial future will be. Having the skill of an experienced Board-certified family lay expert attorney who has experience with divorcing business owners may prove a great asset. You can obtain guidance through the valuation process and sound advice regarding the best options for your situation.