Quatela Chimeri, PLLC

Steps to divorce-proof a company

Many people dream of one day opening their own business. These entrepreneurs work so hard to attain their goals, but once a marriage falls through, the former spouse takes everything. It is for this reason that Forbes suggests small business owners should absolutely invest in a prenuptial agreement to ensure the company will be safe should the marriage ever dissolve. 

In addition to acquiring a prenup agreement, an entrepreneur can take several other steps to divorce-proof a business. The sooner you begin implementing these suggestions, the better off you will be. 

Keep your spouse out of your business

You may have had the idea to start your own business before you even met your spouse. Some couples like the idea of spearheading a new company together, but this creates problems should the marriage ever fall apart. If you want to keep your business separate from your marriage, then do not include your partner at all. If your spouse has a solid claim to developing ideas or helping you build your company, then he or she will feel entitled to more of it in the event of a divorce. 

Maintain good records

Your spouse may also have a claim to your business assets if you mixed your personal finances with your company's. Avoid using money from a joint account to purchase anything for the sole use of your business. 

Give up other assets

If you want to retain 100 percent of your business during the separation, then you should probably be ready to part with other assets. For example, your former spouse may stop trying to acquire any part of the business if you give up the house you shared. This may be the more financially sound decision to make in the long run. 

Put your business in a trust

When you place a company in a trust, it is no longer a marital asset. This action also protects your business' value over time. 

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