Sometimes husband and wife teams can be very successful, while others can lead to great conflict. In the case of the latter, divorce proceedings may ensue.
For those co-business owners considering divorce, it is important to understand how the process will affect the company. There are a few key considerations to be aware of.
As with any assets in a divorce, the court will evaluate the value of the company to determine how to split it properly. An appraiser will probably be necessary in completing this step. Certified Business Appraisers go through extensive training to ensure that the appraisals they provide are accurate and can stand alone in any legal instance, including divorce proceedings. Though hiring an appraiser is not cheap, it is a smart investment in the process to ensure that both parties receive the true value of the asset.
Michigan's divorce law clearly denotes the available options for division. They can be broken down into three categories:
- Sell the business
- One party maintains the business
- Both parties maintain the business
If the divorcing parties are not able to come to an agreement about the business moving forward, selling the business would likely be the best option. However, if the two parties are able to negotiate the terms rationally, it may be possible for one or both parties to maintain ownership.
Some couples can work together concerning business but not romance. In such cases, they may remain business partners. On this rare occasion, it is a good idea to establish a new partnership agreement in writing that fully designates their roles, expectations and restrictions. The agreement should also detail dissolution steps, should they be necessary.
By keeping these considerations in mind, divorcing couples can make educated decisions about their business moving forward. It may also be beneficial for them to speak with a knowledgeable mediator or attorney to address any questions.