Did you know that 42% of married couples are expected to divorce in the UK? That’s almost half of all marriages. If you own a business with your spouse, divorce puts your business at risk. Most happily married couples don’t consider this when starting a business together.
Getting a divorce when you own a business with your spouse can have an effect on all aspects of life and business. Take a look at some of the things you can expect when divorcing someone you own a business with.
Getting a divorce can be time consuming and will inevitably cause a huge distraction when it comes to running your business. You may find that your thoughts are preoccupied by the divorce proceedings. You may even need to cancel business meetings in favour of turning up at court for your divorce.
In addition to personal distractions, your business will also need to comply when it comes to presenting documentation or making time for the business appraisal. You may need to set aside time to locate information and documents you need about your company.
When business partners divorce, there’s no hiding it amongst employees. Your divorce could potentially affect everyone at the business. For example, if your partner has been part of the day-to-day running of your business and decides to resign due to the divorce, other employees will need to pick up the slack.
Additionally, if your partner gains shares in the divorce and becomes an uninvited partner or wants to sell the shares, it puts other partners in the business in a difficult situation. Depending on whether you are amicable with your spouse, your spouse could choose to stay at the business and make things more difficult for you. Employees will notice the change in the atmosphere and may feel uncomfortable staying there themselves.
Dissolving The Business
Few businesses are dissolved because of divorce but that doesn’t mean it isn’t a possibility. If you and your spouse are equal partners there is an option to dissolve your business. Alternatively, if your spouse requests a big pay out from the business to leave, the business may not have the finances available to pay it.
If your divorce becomes ugly, it could be likely that your business is affected too. With anything from bad reviews to poor communication with clients, your business could build up a bad reputation that eventually leads to its downfall.
The best thing you can do before seeking a divorce with a partner that you share a business with is seek advice. Your attorney will be able to explain the best course of action and what you can do to help avoid losing your business in any format. Getting advice will also help to prepare you for worst case scenarios and hope for the best.