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Can you and your ex continue to own a family business?

The demographics of a family change when there’s a divorce. For some families, this is a transition that is easier to accept. However, there are times when external factors might affect the income stream of both spouses. One of this occurs when the parties who divorce own a business together.

Some people might assume that the business would need to be sold or closed, but this isn’t always what happens. It’s sometimes possible that the two adults will continue to run the business together. This only works if there’s mutual respect and a solid operating agreement.

What factors should be agreed upon if the business is jointly run?

If you and your ex will continue to run the business together, each person should have set duties and responsibilities. The more you have outlined in the agreement, the less likely there will be issues to argue about down the road.

You also need to discuss the financial arrangements. This includes how each person will be paid and how expenses will be handled. When it comes to finances for the business, it’s best to try to think of everything — from the small purchases through the major ones. You may even consider a clause that expenses over a certain amount will have to be agreed upon.

Making a decision about the fate of the business is a major factor in a divorce. Be sure that you consider all the options. Work with your attorney to ensure that you’re protecting your interests. This is only one of the main considerations you have, but be sure that you don’t neglect the others as you determine what to do about the company.