Leaving the marriage, saving the partnership

Leaving the marriage, saving the partnership

| Dec 13, 2020 | Divorce

Couples stay together for many different reasons, even if the union is not perfect. However, if cohabitation with your business partner and spouse has become unsustainable, there could be an option that lets you save your company and go your separate ways. 

We help many people divorce. Our clients often share material interests: small businesses, farms, investment companies and professional practices, for example. One of our goals is to explain how these assets worked during marriage versus how they might operate in the future. 

Analyzing marriage vs. partnership

Simply put, marriage is a partnership agreement. It comes with many of the same types of protections as do business structures. It also deals with several of the same concepts, such as property ownership and interest in revenue. 

The difference is that marriage is not explicitly a business arrangement. Without a prenuptial agreement, you and your spouse are subject to a standardized set of responsibilities and rights that might not be ideal for your company. You might be able to work together to come up with something better. 

Recasting your relationship

Divorce is an interesting opportunity for couples who still want to co-own a business. It could allow them to establish a partnership, convert their company to a corporation, divide into different sections or perform a number of other strategic moves. 

This process is different from asset division. In most cases, a new agreement simply defines ownership structure and managerial roles more precisely. It does not usually dilute the assets of the company or disrupt operations. 

If your community knows and depends on you as a team, it might make sense to stay together. Of course, there are usually a variety of options. Your solution should work for your unique situation.