When a Couple Divorces, What Happens to Their Business?

 Posted on December 17,2012 in Family Law

A recent New York Times article details the predicament that some couples find themselves in when they are operating a successful business together, but their personal relationship is headed toward a divorce. According to 2007 Census Bureau figures, about 3.7 million businesses in the United States are owned by a husband and wife. Given the high rate of divorce these days, this situation may be much more common than most people think.

The article goes on to describe the successful businesses that some spouses have continued to operate well after their divorce has been finalized, including a Connecticut law firm, an alfalfa growing business, and an accounting firm. While running a business together initially seemed ill-advised, awkward, and extremely difficult, these former spouses decided to repair their relationship at least to the extent that they could continue to do business together. While the road back to a successful business relationship was not always easy, the former spouses relied on open communication, consistency, and mutual respect to continue to work together and maintain their businesses.

The article advises that should a couple decide to maintain their business following their divorce, they should consider getting therapy to help with their relationship and communication skills, come up with a mutually acceptable partnership or shareholder agreement, just as non-related business partners would, and be upfront with other employees about the situation. Like children in the midst of divorce proceedings, employees in a business may become insecure about their futures and side with one spouse or the other. Therefore, it is recommended that spouses who choose to continue running their business after a divorce take steps to reassure their employees about their intended plans for the business.

Should a divorcing couple consider continuing to operate their business after their separation, both parties should seek independent legal counsel in order to ensure that all details are addressed. Taking steps to consult with an experienced Illinois divorce attorney in this situation is the best way to explore whether a continued joint business venture with your ex-spouse is the appropriate choice for you.