Once you are officially and legally bound to another person in Ohio, almost everything you have becomes co-owned, including your business. Therefore, upon separation, you or a judge must find a way to divide it fairly. A lot will go into this decision, but your options include the following.
Sacrifice other assets
If you want to retain 100% ownership and control of your company, you should consider giving your spouse another asset of equal value to their share in the business. This could be a separate property or your share of some other marital property.
Buy them out
If you can’t or don’t want to give up anything else, you can buy your spouse’s stake in the business. You will need to value the company and come up with a fair price, which may require help from experts. Once you have an agreement, you can draw up the paperwork and make the transfer.
Sell the business
You can also decide to sell your company and split the proceeds between you and your spouse. This could be a good solution if neither of you wants to continue running the company or if it would be too difficult to divide it fairly in a divorce. You will again need to value the business and find a buyer.
How the above options will impact your business
First, if you have to sell the business or buy out your spouse’s share, it can take a toll. In addition, if you have to make payments over time, that can affect your cash flow and make it challenging to keep the business running smoothly.
Secondly, if your spouse decides that they want to be a part of your business, you must restructure your governing body. This can be disruptive and cause changes in how the company runs.
Lastly, divorce can also impact your business emotionally. Your colleagues can find it awkward working with you and your spouse when they know that you are divorcing. And if your partner retains ownership, you have to deal with your ex every day at work. This could affect your productivity.
Dividing a business during a divorce is rarely easy, but with careful planning and consideration, it is possible to reach a fair agreement. You will need to consider what is best for you and your spouse and what will allow the company to continue running smoothly.