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What happens to a jointly-owned business in a divorce?

San Jose business owners who get a divorce may need to decide what they will do with the business if they own it with their spouse. They could keep running the cpmpany together. However, if the divorce is not amicable, this may not be possible.

Another option may be to sell the business so that the couple can share the proceeds. However, they will first need to find out the value of the business. It may not sell quickly, and this could mean that even couples who would like to quickly cut ties with one another may be linked together for some time.

It is often difficult for one person to buy the other out because their money might be tied up in the business. However, there may be ways around this, such as getting a loan or making an agreement to pay the other individual with interest over a long period of time. The person who keeps the business might also want to take on a partner or look for venture capital in order to help with finances.

If a couple decides to continue running the business or if the remaining owner does take on a partner, then agreements should be created that deal with one buying the other out. A buy-sell agreement or a shareholder agreement will deal with this process.

Whether or not they own a business, individuals who are involved in a high-asset divorce may want to work with their attorney to develop a strategy to protect themselves financially. If both spouses are roughly equal earners, this might be less of a concern than if one earns significantly more than the other. For example, an individual who has stayed home with children may be concerned about receiving support. Although California is a community property state, there may be some flexibility in how assets are divided.

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