For many small business owners in Ohio, their company means the world to them. The thought of losing it during a divorce could cause a significant amount of stress. Some spouses, however, are understanding and may choose to dissolve their marriage quickly by leaving a business with its original owner.
This method is generally the easiest when an entrepreneur started his or her own business prior to the marriage, because the company is the owner’s separate property. Such a business owner may still agree to provide some of the business’s income to an ex-spouse through alimony and child support payments.
An ex-spouse’s rights to a business
Some ex-spouses may exercise their legal rights in receiving a portion of a business’s income or assets if the company started during their marriage. Each spouse may then have an equitable right to receive a part of it during the divorce proceedings because the court views the business as part of their community property.
According to CEOworld Magazine, however, some spouses may not have a legal claim to a business if they did not contribute to it during the marriage. An uninvolved spouse who did not show any interest in the company’s growth nor assist in helping it to generate income may not be in a position to request financial support from that enterprise.
Couples running a business together
When a couple starts a business together and both take part in its operations, its value is a considerable asset that belongs to their community property. If one spouse wishes to keep the business, he or she may need to buy out the other spouse, much like two partners in a formal business partnership. As noted by Business Insider, creating an agreement and keeping records to show separate forms of income may help in protecting the company.
Without an agreement, divorce settlement disputes may arise if both spouses are equally committed to the business and neither one is willing to give it up. In this situation, they may need to work out a plan to own and manage the business together after the divorce, without stepping into each other’s personal lives.