You don’t get married expecting a fall out that leads to the dissolution of your marriage. When getting married, there is a special bond that unites the two of you, a sacred partnership bound by love, and mutual feelings of understanding etched too deep in your hearts to be broken or destroyed. Through this partnership, you make promises you hope and even know will carry you through the good and the hard times. You might even own and run a huge business together.
So what do you do when it all falls apart? What happens when your sacred union breaks? You might come up with an agreement on how to take care of your children, (if any), but will your business survive the falling out? Taking all this in, it doesn’t sound like such an awful idea to think of protecting your business. Note, however, that if you hadn’t thought about or expected a divorce, it’s never too late to think of protecting your business from a divorce.
As you reel from the consequences of the family law act, here are some of the things you could do to protect your business from the effects of a divorce:
Hire an independent valuation professional
Considering the financial and emotional stress exerted by divorce proceedings, you should hire a professional neutral to both parties. With emotions running high, you might not understand just how the divorce will affect your business or how you need to value your business. This is where a valuation professional comes in. This expert will value your business based on a 10-year revenue growth projection. This is often done by court-appointed valuation professional, but it won’t hurt to hire a neutral third party.
Forfeit your assets in exchange for your business
If the business is everything to you and if you’re willing to do anything and everything you can to protect it, you might want to trade it for all your other assets. Doing this protects your business because you can use all your other assets to pay off your ex-spouse’s share of the business. Some of the assets you could forfeit include high-value art paintings, corporate stocks, and equipment, among others.
Buy out your ex-spouse’s share in the business
Once you agree with the valuation from the third party, you could begin proceedings to buy out the share of your ex-spouse in the business. If you think that you don’t have enough money to buy them out, you’ll find that you’re very mistaken given all the options at your disposal. For example, you could sell the minority stake in your business or even your employees’ stake.
Don’t have your ex involved in the business
As mentioned above, a divorce can easily take a huge emotional toll on you and your ex. Since you want the best for your business, even with everything going on, remove your ex from getting involved in your business affairs. Despite not getting married with plans of signing divorce papers, consider reducing your partner’s involvement in the business, and protect your business as much as you can. If your ex is too involved, they could as for their share of the profits.
You can easily do this with a post-nuptial agreement and by keeping accurate records.