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Could divorce harm your business?

On Behalf of | Jun 13, 2022 | Divorce

Divorcing as a business owner comes with additional complications. Whether it turns out to harm your business depends.

Unless you have protected your business with a prenuptial, you need to consider it when dividing assets. How a court will see things depends on several factors.

If you began the company before marrying, it would likely be considered separate property. However, you may still need to give your spouse something.

If they did not work in the company directly, this might be limited to compensation for how their contribution to the marriage freed you to grow your company.

If they played some direct role in the company, they might have a more significant claim on any amount the business’s value increased during your time together.

What if you have to give them shares?

If your spouse wants shares in your company, it could create future problems. Even if they intend to remain silent and take their regular dividends, they might change their mind in the future.

Consider what would happen if they wanted to sell their shares. Would you get the first right of refusal? Could you have control over who they could sell them to?

To run a business well takes a lot of time and requires a clear head. Divorcing can reduce your ability to have either of those, so yes, it certainly has the potential to damage your company.

Getting legal help to handle your divorce reduces the chance that it does. Armed with the correct legal information, you can explore your options fully and arrive at the best decisions for you and your company.