When the husband and wife stars of the HGTV reality television show ‘Flip or Flop’ announced their separation, fans of the show immediately began speculating on the show’s future since they could not imagine a couple working together publicly after a divorce. It is not unusual for couples to launch businesses together and though couple-owned company statistics are not currently available, over 400,000 businesses open annually increasing the likelihood of couple-preneurs. Unfortunately, owning a company with a spouse or significant other can lead to complications if the romantic relationship ends. The logistics of dividing a joint business after a separation are rarely simple, and it is not unusual to find yourself in a situation in which maintaining a business relationship is unavoidable.
Doing it Yourself is Not an Option
The most important thing to remember when you find yourself in a situation where your romantic partner and your business partner are the same person is that the do-it-yourself approach is not an option. Even if you and your partner established a business contract or prenuptial agreement prior to getting married or starting to do business together, attempting to handle the situation without assistance could lead to a disaster. Reach out to professionals who can protect your rights as a divorcee or single parent while also looking out for your interests when it comes to your business. Attempting to transfer ownership through a buy-out or trying to shift roles to limit contact could hurt your business and affect your ability to obtain a decent divorce settlement.
Prepare to Work Together
It is possible that neither of you will want to give up your stake in the business, and it might not be financially feasible for you to close the business down completely or search for a buyer. This means you may find yourself working with your former partner in the middle of bitter separation or difficult divorce. When this happens, you must do what you can to separate your personal animosity and hurt feelings from your professional relationship with your spouse. Often you will both need the money earned from the business to pay living expenses, care for children, and pay for the costs associated with the divorce.
Division is Rarely Free
Asset division is one of the most stressful parts of a divorce and owning a major asset like a business together makes asset division more complicated and time consuming. There are several options available for divorcing or separating couples who own a business jointly. In all possible scenarios one or both partner is required to spend money in some way to keep the business running. Buying out one partner so the company becomes a sole proprietorship, selling the company (usually for less than at is worth), or closing the business completely all lead to upfront expenses or a significant loss in income or investment.
Making the Best Choice
Before coming to any agreement with your spouse regarding your joint business, discuss your options with an experienced asset division attorney. The lawyers at Vayman & Teitelbaum are available to provide you with an honest assessment of your situation followed by the realistic advice you need. Contact us today to schedule a consultation in one of our four conveniently located Atlanta, Georgia offices.