Divorce is always a stressful process, and it requires time to collect yourself after this psychological trauma. Unfortunately, the United States is not far behind in the list of countries with a high divorce rate. The divorce rate in the US is estimated to be 2.7 per 1000 people, equalling countries such as Denmark and Latvia.
This step becomes more stressful when the spouses are running a business together. It becomes not only a matter of living together, but the joint finances make it difficult to decide which step to take. However, it is not necessary to dissolve a business partnership because the marital relationship has failed.
If you intend to get divorced and are concerned about the ways to manage your business partnership with your ex-spouse after divorce, here is a descriptive guide to help you understand how to manage a business partnership following a divorce.
Ways to Manage a Business Partnership After a Divorce
There can be certain ways and terms on which the spouses can agree after the divorce on what to do about their joint business.
1. One spouse buys out the other.
After the divorce, if the spouses do not want to move forward with the business, they can choose this option. In this option, one of them buys out the shares or interests of the other and retains the business.
This requires the determination to buy out the other’s interest, as well as other marital asset divisions. The court may also require the one who buys out the business to make equalization payments to the ex for a specified time in the future.
This option is quite complicated and can be difficult to navigate on your own. Experienced San Diego divorce lawyers recommend getting skilled legal representation in a business division if you are in a similar situation.
2. Sell out the business.
In this case, if both of the spouses are not willing to run a business together or buying out the interest is not a solution either, they should sell it out and divide the proceeds.
It is a solution commonly seen when dealing with properties such as marital residences. This is also a complex process that requires the permission of the court if one of the spouses is willing to continue the business.
Not only this, selling the business is itself a challenging process. It can take time to find an independent third party willing to buy the business. And if you’ve already found a buyer, then there is the issue of disagreements on the selling price.
In addition to this, spouses may have to consider how they will manage the business and the time it will take to find a party and sell the business.
3. Co-own the business.
The most suitable way for the spouses is to keep their professional and personal lives separate and focus on leading their business together. It may be difficult and could include psychological and emotional challenges, but by maintaining a borderline, amicable spouses can run the business together even after the separation.
Instead of selling out their business at a comparatively cheaper price, two partners can choose to distribute the roles of the business like adults. They, by their mutual decisions, can agree on what role they are going to play in the growth of the business and can get mutual benefits and shares from the business. After some mutual decisions, they can agree on their share of responsibilities and the returns each party will be getting from the revenue.
It is a productive approach that can help both spouses stay financially stable and work through the process of divorce in a sensible way.
Tips To Run A Business With Your Ex-Spouse
If you’ve chosen to work with your ex-partner for the sake of your business, then follow these tips to make the partnership fruitful:
1. Establish boundaries
Working with your ex-spouse is a challenging task. Setting some well-defined boundaries between you and them can ensure your mental relaxation along with the growth of your business.
It is important not to mix your personal and professional lives together. Make sure to set boundaries regarding the discussions of any personal matters and keep your interactions strictly professional.
Try to accept the new roles you have been assigned to work together by virtue of your mutual affirmations.
2. Communicate openly
While communicating with your ex-spouse, your talk should be professional rather than asking about what they are doing nowadays. Talk openly about the ideas that you have in mind regarding the business without bringing the complexities of the past into it.
Be transparent and honest about the goals, expectations, and modifications that you wish to bring in for the growth of your business. Regularly check in with each other to ensure the efficiency of working with your co-partner.
3. Act professionally
While in the workplace, with your ex-spouse, you must act professionally. Your emotions should not prevail over the ethics of professionalism. Don’t indulge in the gossip that may devalue your ex-partner in the eyes of other workers.
You should also appreciate each other’s efforts to maintain a healthy environment for the growth of your business. Treat each other with respect.
4. Foster a positive environment.
A positive work environment will lead you to growth rather than getting involved in reasonless conflicts. Again, keep in mind that there will be many hurdles when working with your ex.
A positive work environment will boost your workers’ productivity. Celebrating the success together, supporting each other’s ideas, and appreciating the efforts will not only help in the growth but also help get over past experiences that turned out bad.
5. Focus on the business’s success.
You should document an agreement about the conflicts that you might think will arise while working with your ex-spouse. The document should address the conflicts and the solution of the conflicts. A framework should be made to address these sorts of issues.
It will help both in prioritizing the growth of your business and your personal grievances. Set aside personal guilt and conflicts and work towards the growth and success of your business through cooperation and support.
6. Take care of your well-being.
You should have an exit plan with you. There is a possibility that any one of you may want to leave the business. To save yourself from the complication of selling out the business, an exit plan will benefit you through legal proceedings.
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