Finding A New Path Forward

Should you try to keep your family business going after divorce?

On Behalf of | Jun 10, 2024 | Family Law |

Running a family business is challenging even in smooth times. When a couple who co-own a business decides to divorce, the future of the business can become uncertain.

The decision to keep the business running involves several factors that require careful consideration.

Evaluating the business’s stability

After a divorce, maintaining a family business can present significant challenges. To ensure it is worth the effort, the first step is to evaluate the business’s stability.

Consider the business’s financial health and the ability to function without the divorce affecting operations. If the business suffers from financial instability or if personal conflicts spill into the workplace, it might be better to consider alternative arrangements.

Setting boundaries

Establishing clear professionalism and boundaries is key. Both parties must agree to keep personal issues separate from business matters. This separation helps in creating a professional environment where the focus remains on the business’s success.

It is important to set clear roles and responsibilities to avoid misunderstandings and conflicts. Additionally, effective communication is necessary to maintain professionalism.

Seeking advice

Reaching out for legal and financial advice is a smart move. Professionals who regularly work with high-asset divorce can help draft agreements that protect the interests of both parties and the business.

Financial advisors can provide insights into the business’s viability and suggest strategies for managing finances post-divorce. Professional advice ensures that the decisions made are in the interest of both parties and the business.

By addressing these points, it is possible to continue running a family business successfully after a divorce. However, if maintaining the business proves too challenging, exploring other options such as selling the business or one party buying out the other might be the wise solution.