Long, Murphy & Zung, P.A.

How a divorce can impact your small business

It's not uncommon for the words expensive and messy to be used to describe divorces. It can get even more hairy if you own your own business though.

Depending on what life stage your company is at, whether it's just in its infancy or it's a longstanding, thriving one, preserving it seems like an impossible feat when you're headed toward divorce.

Divorce is often an emotional process for the two parties involved. As partners wrangle with trying to split up finances and finding new places to live, it's common for them to be overcome with fear, despair and a number of other emotions.

This can trickle into a small business owner's work environment. It, in turn, can make it difficult for them to render rational decisions that are best for their business. This can impact the work quality that they're able to put out, impacting the company's bottom line.

Companies that are relatively new need a significant investment not just of time, but also financial resources to be able to thrive. If the startup funds that you've intended to commit to the company are either cut off or reduced, then it can make it impossible to keep it afloat at this critical stage. If you operate a longstanding company, then it may risk being crippled by your ex's claims of ownership rights to it.

As unfortunate as it may sound, companies that are started after a couple marries, even if only one of the spouses runs it, become essentially joint assets. This entitles your ex to wage a demand for a portion of the company or the proceeds it makes.

If you are either signed a prenuptial or postnuptial agreement with your spouse or if you can prove that you started and ran the company long before meeting him or her, then you may have some wiggle room. In cases like this, you may be able to retain either full or majority right to your company.

A Naples complex asset division divorce attorney can advise you of legal options in your case as he or she gains a better understanding of your business, how it was set up and how it's been run.

Source: Minute Hack, "How to avoid divorce disaster for your small business," Oct. 26, 2017

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