
Divorce and Business: What Will Happen if I Own a Business With My Spouse?
On Behalf of Law Offices of Michael A. Robbins | Apr 16, 2019 | Uncategorized |
If you and your spouse own a business together and are considering divorce in Michigan, you will need to think carefully about how your business will play a role in the process of property division during your divorce. Under Michigan law, any marital assets or debts of a couple getting divorced in the state are divided according to a theory known as “equitable distribution.” What this means is that your property will be divided in such a way that the court deems fair or equitable to both of the spouses. When the parties can come to an agreement about property distribution (a property settlement), the court can sign off on that settlement agreement as long as it is not clearly unfair to one of the parties.
Where does this leave your business? What should you do if you own a business with your spouse? The answers to these questions depend on many factors, including whether you plan to keep your business open or to close it down.
When You are Planning to Stay in Business with Your Spouse
In some situations, divorcing spouses remain on good-or at least working-terms with one another, and they plan to stay in business together even though they will no longer be married. Whether the spouses are in business only with one another, or whether they are in business with other partners or owners, this option of both spouses remaining as owners in the business is typically the easiest in a divorce but not a very common occurance. The business may still need to be valued and “distributed” for purposes of property division, but typically a court will determine each spouse’s stake in the business and distribute property based on the understanding that the spouses are remaining in business together and keeping their company open.
You or Your Spouse Plans to Leave the Business
What about a situation in which one of the spouses wants to keep the business open, but the other spouse wants to leave? The answer to this question depends in part on the type of business structure you have. If you have a partnership, in most cases it will be possible to “buy out” the spouse who wants to leave. The spouse who wants to remain in the business can be responsible for buying out the other spouse, and the court can take into account the assets associated with the business when distributing property.
If you have a limited liability company (LLC), however, you may need to dissolve the business and re-form the LLC if one spouse wants to leave. Whether you will need to do this depends on whether you already have an agreement in place for what will happen when one of the members’ ownership is purchased or transferred. If there is no agreement in place, it may be necessary to dissolve the LLC altogether and to create a “new” business with the remaining members.
Selling the Business
Another common option in divorce is selling the business. This can be difficult-or even impossible-if the spouses are in business with additional partners, members, or owners. However, when the spouses simply are in business with one another, it is usually possible to have a business valuation done, sell the business, and have the assets and debts distributed accordingly.
Contact a Michigan Divorce Lawyer
If you have questions about divorce and your small business, a Michigan divorce lawyer can help. Contact the Law Offices of Michael A. Robbins for more information.
Recent Posts
Archives
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- May 2016
- April 2016
- March 2016
- February 2016
- December 2015
- November 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- March 2015
- February 2015
Categories
RSS Feed
Let us help you

Contact The Firm
3910 Telegraph Road
Suite 200
Bloomfield Hills, MI 48302
Phone: 248-646-7980
Fax: 248-646-7989