How mediation protects family-run businesses during divorce

 

Divorce can lead to the break-up of family units where children are involved, with divorce mediators often called in to help with difficult decisions about where the children will live and how much time they will spend with each parent.

But for many couples – including those with and without children – there is another product of the marriage that must be considered, in the form of a family-run business.

More and more of us meet our partners through work, and it can seem sensible to combine those common talents into a joint business venture – at least until the relationship begins to break down.

After that time though, you are faced not only with a difficult and turbulent personal life, but also with a professional life that is subject to all of the same emotional stresses.

There are several potential outcomes, and of course the precise way forward will vary in every unique case:

  • One partner retains the business and continues to run it.
  • Both partners remain amicable enough to continue in business together.
  • The business is sold or wound up and the proceeds shared.

At a time when your personal lives are already in a state of upheaval, with one or both partners likely to face moving out of the family home, it’s worth considering whether you can continue to run the business as before, to reduce the number of major changes you face in the immediate future.

 

How divorce mediators can help

No matter which way you decide to proceed, divorce mediators can help in cases that involve family-owned businesses.

By helping proceedings to stay more amicable, mediators can increase the number of businesses that continue to operate under joint ownership – not all divorces have to be acrimonious.

We also play an important role in advancing the negotiations if the business is to pass into single ownership, as this can raise questions of adequate compensation for the partner who will no longer have a stake.

In more complex cases where the business existed before the marriage, mediators can offer an independent ear and help you to understand who owns the company in the eyes of the law – and to agree on how much remuneration, if any, is owed to the other party

Finally, if you are unable to continue in business together and don’t want just one of you to run the company either, mediators help to reduce court fees and legal costs, so you can keep as much as possible of the proceeds of any sale or remaining profits after winding up the company.

This is all in addition to family mediators’ role in getting your divorce to an amicable conclusion quickly, at lower cost, and taking into account the needs of all family members including any children you might have together.

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