Are you a business owner? Do you take great pride in the company you have built? Will you do whatever it takes to protect your company?
Unfortunately, there could come a time when your business is in jeopardy. For example, you could be faced with divorce. In this case, your soon-to-be ex-spouse could seek to gain control of some of the company.
You can protect yourself against this in many ways. Consider the following:
- Sign a prenuptial agreement. If you started your business before you wed, ask your spouse to sign a prenup. When designated as separate property, your company can't be divided in the event of a divorce.
- Opt for a postnuptial agreement. Similar in many ways to a prenuptial agreement, this is signed after you have tied the knot.
- Put the business in a trust. By making this move, you can prevent your company from being considered a marital asset.
Timing is important in a divorce
All of the above can work in your favor if you do so when your relationship is in a good place. However, if divorce sneaks up on you, it's possible that you could be in jeopardy of losing part of your company.
Although you'll face more challenges, there are still steps you can take to protect your business and maintain 100 percent ownership. To start, answer these questions:
- Was the business started during your marriage?
- Does your spouse work for the company in any capacity?
- What role has each person played in growing or operating the business?
In some cases, you may be able to sacrifice other assets in order to maintain control of your business. This means losing out elsewhere, but ensuring that your business is not subject to asset division.
As a business owner, utilize legal ways to protect your company in the event of a divorce. If a divorce is imminent, you may consider whether selling a minority stake in your company to a third party investor could prevent your spouse from attempting to wrest control of the business from you.
If you find yourself in this situation, don't hesitate to learn more about your legal rights. You need to know how to protect your company at all costs.