Owning a business can be a great joy, as this gives you the opportunity to control your own destiny.
When you go into business with your spouse, you hope that it doesn’t put a strain on your personal relationship. Unfortunately, there are times when this happens. Taking this one step further, divorce is always a possibility.
Although you hope that divorce never comes into play, if you’re a business owner, you need to consider the fact that this could happen in the future. This thought alone should lead you to learn more about the financial and emotional burden that divorce could have on your ability to manage the business.
Divorce can lead to many types of disagreements in regards to business ownership. The most common dispute occurs as the result of confusion about how to divide the business.
A shareholder agreement, for example, is one of the best ways to outline how a business will be divided in the event of a divorce. It can be used to do everything from assigning ownership after a divorce to guiding the actual transfer of ownership.
A prenuptial agreement is a consideration for those who own a share of a business before tying the knot.
Going through a divorce is bad enough. Your personal life will change forever, but you don’t want this to also have a negative impact on your business.
With the right approach, you can draft an agreement that benefits both individuals as well as the company as a whole. This will put everyone in a better place should your marriage end in divorce.
Source: Allied Business Group, “Business Valuation Issues in Divorce,” accessed July 06, 2017