Can a family business live happily ever after even after a divorce?

divorce-1021280_640By Chloe Taylor

No one likes to think about the possibility of a marriage not lasting forever, but that’s a real possibility. When people get married they start a whole new life together, and besides family and home, they often start a business too. In fact, family enterprises are the most common in the world, and at least half of the companies in U.S. are founded by a family. When divorce comes into this picture, it brings a lot of difficult question on the table, and one of them is whether to divide the business, shut it down or keep it alive in spite of all the changes. Let us see the odds, possibilities and options.

Partners in work and life

The first question to ask is: Does the business have to go down along with the marriage? If both partners appreciate the company equally, and if they are divorced by a mutual agreement, keeping the company alive and well for years to come is possible. There are some things ex-spouses have that other partners do not, such the mutual trust gained over the years and the emotional and financial investment they made into the firm; they were there when the company had nothing and they remained there through difficulties and successes. If you manage to make peace with the lack of partnership in your love life, you will be able to gradually adapt to this new situation, and learn to appreciate the business partnership you have.

Going separate ways

In some cases, not even all of the efforts of this world can help prevent the private life from shaking up the business life. If you and your ex-spouse see that there is no real possibility of working together after your marriage has fallen apart, it’s better to let go and go your separate ways. If you try to keep the business operating in such conditions, you will only hurt the business by not be able to share responsibilities, causing stress and hostility among the employees, and being stressed out yourself.

Sharing the spoils

Valuing the business and dividing the finances and ownership might vary from state to state, just like divorce laws do. In each state, though,  a similar list of factors will determine whether the business asset is considered private or marital.

-Date of marriage compared to the date when the business was founded;

-The source of funds for starting the business;

-The labor and financial related contributions given by spouses.

-Any marital funds invested in the business after its start.

If you find it difficult to determine the value by yourself, you can hire professionals or even mediators. That will keep the fights and misunderstandings at the lowest level possible.

It comes with a cost

Your finances are not the only thing that can suffer damage because of the divorce. In fact, it is you who will go through the worst torments, which can leave you stressed, anxious and tired. As such, you won’t be able to perform your work duties as efficiently as you did prior to the divorce. A way out of this endless loop is visiting a therapist or sharing the responsibilities with some of the employees you trust the most.

The worst option

The worst outcome would be shutting down the business. In some extreme, and rather unusual cases, the court can decide that the business should be sold. The usual practice is to have the non-owner to receive more cash or the property outside the business, but that can still affect your company by leaving you with insufficient funds. The worst solution is to start saving by firing employees or selling your equipment. You should always look for a better way out. For instance, you can change the company’s premises, and move to a more affordable office space, downsize the workload, find more favorable vendors, etc.

To answer the question from the title: Yes, it can. But, as in every fairy tale, you will have to overcome a number of obstacles to reach your Prince Charming, or in this case a member of royalty named ROI. Good luck.


Chloe Taylor is an art historian, environmentalist and a young blogger. She is learning and writing with passion about design, business, success and productivity. Chloe is a huge fan of social media, photography and dark chocolate and DC comics. You can find Chloe on FB or Twitter.


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