If you are a business owner facing a divorce, you are most certainly coming to terms with the fact that your business could end up chopped up and divided like any of your other assets at the negotiation table. For many businesses, this is a fatal blow. Like many business owners, you may be searching for a way to ensure that your business can survive your divorce and remain intact. Well, there’s good news and bad news. The good is that it is possible for your business to weather the storm of your divorce and make it to the other side in one piece. The bad news is that it will likely require some significant sacrifices on your part.
Depending on a number of factors, such as when you began your business in relation to your marriage and the involvement that your spouse had in the business in the course of your marriage, the law may entitle your spouse to a portion of the business as it would entitle them to a share of your savings account or your home. Of course, many businesses can no more survive being split like an asset than a person can survive losing half of his or her body. If you do not act quickly and decisively, you may create great difficulty for your employees and customers who depend on you.
In order to have a chance at saving your business, you must be willing to sacrifice other assets and make some tough decisions. First, make sure that you have impeccable records of the affairs of your business, and keep your business and personal finances separate. Also, it is important to make sure that your spouse does not have involvement in the business going forward. This might entail removing them from a position they currently hold.
If your spouse is going to give up a stake in the business, that may mean that you meet him or her halfway by offering to forego your stake other assets like a family home or investments. It may be very difficult, but that is the reality of saving a business when you have no existing prenuptial agreement to protect it.
Do not hesitate to reach out to an experienced attorney who can help you navigate this tricky area. With proper legal guidance, it is possible to survive this difficult season and emerge on the other side ready to embark on a new season and a fresh start.
Source: Entrepreneur, “How to Divorce-Proof Your Company,” Carol Tice, accessed April 14, 2017