Leaving a marriage may also mean leaving a business for some

This article looks at three of the most common ways of dealing with a small business during a divorce.

Married couples who own a business together never plan on their relationship - whether as a married couple or as business partners - breaking down. However, as the Globe and Mail reports, figures show that as many as 40 percent of Canadian marriages will ultimately end in divorce and many of those divorces will involve joint-business owners. For such people, a divorce is much more than the end of an emotional relationship, it could also signify the loss of a business and even of their job. A small business is often just as much marital property as the family home or car, which can make dividing such property particularly difficult during divorce. Below are the three most common ways a small family business is dealt with during divorce.

Dissolve and split the business

Perhaps the most straightforward way of dividing a business equally between both partners is to simply dissolve it and divide the proceeds. This solution can prevent either spouse from feeling like they have "lost" the business to the other party. Problems, however, can easily arise, the most common of which, according to the Financial Post, would be a disagreement about how much the business is actually worth. Additionally, one spouse may be reliant on the business for their employment and they may lack the qualifications necessary to find similar employment elsewhere at the same salary.

Continue joint ownership

Legally there is nothing to prevent a divorced couple from continuing as business partners. If the two parties can put the interests of their business before their own personal problems, then they are free to keep their business going as it was before. This situation can provide for a great deal of continuity and stability, which can be reassuring for employees and business clients, but it has one obvious drawback. Keeping emotions out of a divorce is difficult if not outright impossible for many people. Despite the best of intentions, mistrust and resentment can often seep into everyday business decisions, thus making the running of the business that much more difficult.

Buyout

Perhaps the most common solution is for one spouse to buy out the other spouse's interest in the business. This solution has the advantage of being able to keep the business running while also maintaining the livelihood of the spouse who was more personally and financially invested in the company in the first place. As with dissolving a business, however, disagreements can still erupt over the value of the business when buying one partner out and those disagreements may ultimately drag out the divorce longer than would otherwise be necessary.

Legal advice

A family lawyer can help a person who is going through a divorce deal with complex assets, such as a small business. Regardless of what a client wants done with their business, the right lawyer can guide them through the different options that are available and how they may impact both the client's immediate and long-term interests.