Divorces are messy, expensive, and painful for everyone involved. However, there is a less obvious cost: the damage done to your business. The emotional strain caused by the divorce can impact your ability to run the business effectively. The division of assets can cause extreme financial strain that affects the health of your business. Even if you have an achromatic separation, the family likely owned businesses will face protracted ownership allocation and division negotiations.
A current or past marital partner can taint the relationship between a company and its customers and employees. If you’re going through a divorce, you will have to be concerned about how it will impact your business. You may wonder how a divorce can affect your business and what you can do to reduce the potential impact. Following are some guidelines for protecting your business when going through a divorce.
Guidelines on How To Protect Your Business Through a Divorce
You’ve started your business with the brightest of hopes and an optimistic spirit. As you file for divorce, you’re trying to save what you have built by protecting your business from the inevitable. By taking the proper steps and doing both the right and legal things, you can minimize any negative repercussions.
Higher a separation lawyer
It’s in your best interest to hire an attorney specializing in family law and know how these cases can affect business. An experienced separation lawyer can help you navigate the complex legal system while protecting your interests.
For example, a quick search for a separation lawyer in Perth reveals about $250 to $400 per hour. Well! This is how much it costs for a separation lawyer in Perth.
Higher asset protection
If possible, consider increasing asset protection in your company’s ownership structure by adding another layer of protection between yourself and the company. It will reduce the ability of your spouse to take control of the company’s assets if they file for bankruptcy or become insolvent.
Consider appointing a trustee or receiver
Consider appointing a trustee or receiver. A trustee or receiver will manage a portion of your assets while you’re going through a divorce. This person can ensure that all decisions are made following what’s best for the company, even if one spouse wants to sell it or liquidate assets at an unfair price. The benefit of this approach is that it allows you to continue operating your company while keeping sensitive information confidential from your spouse.
Keep Your Spouse Out of the Business
If possible, keep your spouse out of the company’s day-to-day operations as much as possible. It includes paying bills, filing taxes, and making decisions about staffing and equipment purchases. If necessary, hire an outside bookkeeper or accountant who can handle these tasks without accessing any confidential information about your finances or clients’ accounts.
Keep good records and documents
Make sure all records of financial transactions are accurate and up-to-date so that there isn’t any question about what belongs to whom. When it comes time for negotiations, make sure you have documentation of all expenses and income related to your business. Primarily, keep documents of those related to capital investments or improvements that have increased their value over time.
Sign a prenuptial agreement
A prenuptial agreement is between two people about to marry or enter into another type of relationship, such as common-law marriage. It details how their property will be divided if they get divorced. If you’ve signed a prenuptial agreement before getting married, it can help protect your business interests during your divorce proceedings.
Bottom Line
If you’re going through a divorce, it might be tempting to overlook the details of how you’ll protect your business. However, protecting your business is just as important as protecting yourself and your family. If you wish to avoid these traps and ensure your business gets the fair treatment it deserves, then this article is for you.
