Spouses who own a business together have likely put in a lot of time and effort into growing and maintaining their company. Because of their emotional and financial ties to the business, they may decide to continue to operate it together, even during a divorce and perhaps after this process is complete.
Any couple that’s considering jointly operating a business as they’re going through a divorce should ensure they carefully consider ways to minimize conflict and to protect their individual and collective business interests moving forward.
Focus only on the business, not personal matters
Maintaining a strict boundary between personal emotions and business decisions is crucial when exes operate a company together after they split up. It’s easy for personal grievances and unresolved emotional issues to seep into professional interactions, but this can adversely affect the business’s day-to-day operations and long-term growth.
To prevent these issues, both parties must commit to a professional demeanor at work by treating each other with the same respect and courtesy they would offer to any other business partner. This includes communicating effectively, making decisions based on the business’s best interests and keeping personal conversations and issues out of the workplace.
Outline partnership terms in an agreement
Drafting a comprehensive agreement is a fundamental step for ex-spouses running a family business together. This agreement should outline each person’s roles, responsibilities and decision-making powers to better ensure that there is a clear division of labor and authority. It should cover financial arrangements, including salary, profit distribution and investment decisions, to prevent disputes over money. The agreement can also specify the terms under which one partner may buy out the other’s interest in the business, should one or both decide that continuing to work together is no longer feasible.
Set conflict resolution standards and procedures
Setting up standards and procedures for conflict resolution before any issues occur can help manage these situations constructively and efficiently. This might involve agreeing to mediation or arbitration as a first step in resolving disputes.
In many cases, the fate of a family business is determined during the property division process. It’s critical that both parties understand exactly what they’re agreeing to before they sign any documents. Working with a legal representative familiar with these matters may help provide vital information that can assist with property division decisions that will impact both spouses’ well-being and their business as well.