1. Protecting Family Businesses (from themselves)

Protecting Family Businesses (from themselves)

Author: Real Estate Holding Company

Published Jul 13th, 2023Updated Feb 14th, 2024
Nationwide Service No Hidden Fees 24-Hour Turnaround

You may believe that getting a divorce will ruin your family business and this is simply not the case. In many family businesses, couples who divorce or separate often find a common ground on which to keep the family business running.

Known as a copreneurial business relationship, couples who are married are joint business partners. When divorce or separation is inevitable, often, these copreneurial business relationships become strained but do not have to fall apart. The key factor is finding trust among and within each other from a business perspective.

While your trust in your spouse may be defeated in terms of a personal relationship, if you own a business together, that trust should be examined closely and in terms of a business and working relationship. If you, as a couple, can find the trust and loyalty in terms of business decisions, the family business and your copreneurial relationship may continue to be quite profitable.

Because a family business, in which a couple shares joint ownership, often experiences strain, many couples find that after divorce the strains of working together often disappear. Because living and working together requires some degree of boundary while still combining intimacy and loving one another even in the most difficult of times, when divorce is upon you, these complications often disappear.

One area of primary concern can be the implication your copreneurial business relationship will have upon your children and extended family. For many couples, children and extended family often find some degree of difficulty in differentiating the couple as individuals and as business partners. For this reason, creating boundaries, setting clear role guidelines and ensuring loyalty to the success of the company, are all ways in which to improve the skepticism from some family members.

While the marriage may be in dissolution, if each individual in the relationship clearly identifies the roles of the other, decide how best to manage their conflicts and carry, at least, a mutual business respect, the family business will continue to flourish. Of course, the issues of financial gain and financial protection are also important and, for this reason, consultation with a financial planner should occur early in the separation and divorce proceedings.

As with any complication that results from separation and divorce, many couples find they are struggling to make the decision about how best to handle a family business and copreneurial relationship. With proper boundaries and financial establishment, you may be able to continue your business relationship even though your marriage has ended.

Let’s Make Your Business Official.

Free BOI/CTA filing for all clients. Receive your LLC, EIN, and bank account SAME-DAY.

Start Your Business