Divorce With a Business Involved:
The Impact & How to Protect
During the legal break-up, people worry about a lot of things including their businesses. The lack of knowledge about how to split it or keep it can drive small start-up owners and big companies’ principals crazy, so it’s better to find out how it works before filing for an online divorce. In the post below, you’ll find out everything about divorce for business owners and evaluate your chances of getting the job done fast.
What divorce does to people’s businesses?
First, let’s take a look at the divorce impact has on the business of spouses. Regardless of whether it is a family business or owned by a wife or a husband, it can go through the following things.
It affects daily operations
Once it’s become known that the business owner’s getting divorced, the processes at work start to disrupt. It happens due to the need to cram your divorce matters like meetings with an attorney, documents filing, hearings, etc. into your daily schedule. The divorce process makes a company owner more stressed out, less focused on work, and more prone to emotional reactions to issues.
It can have an impact on your partners and employees
If your business is about to be divided as the result of divorce, it may affect its stock price. Imagine having to give your shares away to your spouse: they’ll become a new shareholder whom your partners may not know, it can cause misunderstanding and conflicts. Also, your ex may not be interested in running or developing your business, so they can sell their shares and make your business less influential.
It can lead to the business dissolution
Although this doesn’t necessarily happen to you and your business, it is possible. For instance, you have no other money to pay your spouse except for the potential selling of your business. Or you own a company with your spouse equally and agree to dissolve it to end the marriage peacefully. All of those options are undesirable yet they can be the case if your spouse asks for much money to be paid as alimony or child support.
Steps to protect your business during divorce
Now, you can find out what to do to avoid your business failure if you decide to get divorced.
Sign the prenuptial agreement
Although it won’t help if you’re already going through a divorce, it is crucial if you’re only entering a new relationship. A prenuptial agreement is a deal that a couple creates before getting married. It consists of several points depending on what future spouses possess and what they’d be splitting in the case of a divorce. Therefore, real estate, pieces of art, cars, and even businesses fall into this category and are worth to be outlined in the prenuptial agreement. Once you have it, you’ll have to altercations in court: a judge will just divide your property and business accordingly.
Create a postnuptial agreement
In case you’ve been married for quite a long time now but aren’t going to divorce anytime soon, consider signing a postnuptial agreement. The only difference it has from the prenuptial one is that it’s created after the marriage. You can still outline the same issues there: business ownership and division, your property, retirement plans, assets, etc. The only things that cannot be added to postnuptial and prenuptial agreements are child custody and alimony.
Take care of constructing a shareholder agreement for all who own a business
This is a separate document that can be of great help if you own shares in a business together with your spouse, or if you’re not the only shareholder in a business owned by your partners. In such an agreement, all shareholders outline what will happen to their business in case any of them gets a divorce, dies, etc. This can save almost any company from being dissolved as the result of divorce or sold partially to undesired owners.
Divide your family finances from your business income
Another important thing is having separate bank accounts for your marital money and those you get from and use for your business. It will not only ease your understanding of the current financial matters but also will be important during a divorce. Since you’ll have to prepare financial statements for the court to demonstrate your situation and ability to pay potential alimony or child support, dividing your business money and family money is necessary.
Consider the possibility of a settlement agreement
Finally, if you missed the time to create a prenup or postnup agreement with your spouse but have nothing to contest in court, you can construct a settlement agreement to go through an uncontested divorce. Outlining the way you split your business in detail along with other important issues will show a judge that you don’t want to start tiresome litigation and are eager to divorce peacefully. Thus, the process will be painless for your business, divorce will be finished in weeks.
As you can see, there are numerous ways to get a divorce with a business involved and not screw it up. Choose the most appropriate track for your case and don’t hesitate to get legal advice if you need it to speed up the process.