For many of us, finding true love and working in our dream job are common goals. Unfortunately, the former can soon turn sour, resulting in a breakup or divorce, and if you’re an entrepreneur who runs their own business, the last thing you want is for your operation to be affected.
Your company is most likely the biggest financial asset you possess, so here are five things you can do to ensure your company is protected when going through a divorce.
Sign a Prenup
When marrying the person you love, you may not like the idea of having a prenup in place. However, if you’ve spent many years building your small business from the ground up, your hard work and money may end up being a waste of time.
A prenuptial agreement is one of the most common ways of protecting your business that each partner must sign before tying the knot. The prenup details what will happen to all income, property, and assets should you decide to divorce.
Keep Business and Household Finances Separate
When it comes to keeping on top of your small business finances, you may prefer to do it yourself rather than hire an accountant. To monitor the money side of things, the last thing you should do is throw household finances into the mix.
Keeping your finances separate will help you track cashflow much easier and ensure there isn’t any doubt when determining matrimonial and non-matrimonial assets.
Avoid Involving Your Spouse in the Business
If you’ve decided to divorce and the decision is anything but amicable, your spouse may try anything to show they had a role in helping you with your business. This means you should avoid including your spouse in any area of your company, otherwise they may provide evidence during the divorce process that could affect your future.
Don’t Appoint Your Spouse as Company Director
Many business owners make the mistake of listing their spouse as an employee or company director for tax reasons, regardless of how much involvement they’ve had in the company. When filing for divorce, this allows your spouse to stand their ground and argue they played a greater role in your company than they actually did. Instead of nominating your spouse for a key role, it’s best to give them shares instead.
Find a Reputable Divorce Lawyer
Going through a divorce can take its toll on anyone’s health and wellbeing, so to avoid conflicts and confrontations, there are lawyers who specialize in divorce that can help. If you’re worried about what will happen to your business, finding a divorce lawyer with excellent communication skills will ensure you’re kept in the know from start to finish, and you’ll also have an idea of what to expect.
None of us get married with the thought of divorcing later down the line. If you find yourself in this predicament and want to avoid any nasty surprises, all the tips above can help divorce-proof your company and assets.