A small business can survive and even thrive after the divorce of its co-owners or "copreneurs" as a business couple who owns a shared company is sometimes called. It's hard, but it can be done.
In the US, couples co-own 3.7 million small businesses, according to the Census Bureau. When all is going well in the business and in the marriage, the arrangement may be beneficial for all parties. But, what happens when the marriage dies? Does the business survive? Most of the time, the business relationship ends too and the revised company ownership is thrashed out in court.
But, there are times when the relationship may be reborn to one of business only and the company survives and even prospers.
An example stated in a recent NPR article is a couple who divorced and a few years later, when one suffered an injury, the ex was invited back into the firm as a business partner. "We actually knew that we were not suited to each other at all in any other way, but the fact is that he has this brilliant marketing mind, and all we ever talked about on dates were business ideas."
Even though the marriage did not succeed, they were able to maintain the business and raise a child together.
Making It Work
Kit Johnson of Capella University, who has studied couples who've stayed in business after a divorce, says in the majority of cases divorce is a business killer. However, in some cases co-owners are able to make a distinction between their personal and professional lives.
Johnson and a co-researcher followed nine couples whose business relationship remained intact even under some grim emotional circumstances. "What we found was that, yes, the business can survive. As a matter of fact, it can even thrive," Johnson says.
But that is the exception, not the rule. Usually, a divorce can lead to the restructuring or even a forced sale of the business.
Kathy Marshack, a psychologist in Portland, Ore. who has studied and counseled couples and families who have struggled to keep businesses intact, contends that it's easy to be blind about love or business, but it's also unwise. "We just believe that if we love somebody that should be the tie that binds us together in loyalty forever. But we live here on Earth, and all kinds of things happen here," she says.
Jeff Landers, founder of Bedrock Divorce Advisors, says often his clients want to retain their business in spite of their ex-spouse without realizing there might be other emotional and financial hurdles to deal with down the line. "If there's going to be, down the road, a girlfriend or a new wife, how awkward and difficult would that be, especially if the new spouse doesn't want the old spouse around?" Landers says.
When divorcing, co-owners of a business face major decisions not only about their personal relationship with their ex, but also their business relationship with each other and the viability of their shared company.
If you are facing a divorce and are concerned about how your assets will be divided, Stange Law Firm, PC can help. Our firm focuses exclusively on family law in the areas of divorce, child custody, child support, paternity and other domestic relations issues.
To schedule your confidential half-hour consultation to meet with an attorney in St. Louis, Kansas City and beyond, call Stange Law Firm, PC at 855-805-0595 or contact us online.
Source: NPR, When Divorce Leads To A Happily Ever After For A Small Business, by Yuki Noguchi, April 17, 2014