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Business owners facing divorce may need to take precautions

As business owners, many California residents likely understand the importance of keeping business affairs in manageable order. Any number of events could throw a wrench in operations that may have otherwise been running smoothly. For business owners facing divorce, taking steps to protect business interests may be worth the time and effort.

Even before the potential for divorce arises, if owners marry, they may want to ensure that they create agreements in relation to their marriage and the business. If more than one person owns the business, ownership agreements could help parties avoid fallout from another owner's personal issues. For the marrying owner, a prenuptial agreement could help avoid negative impacts that divorce could have on business assets.

If individuals have gone into business with a spouse, they may think that formal agreements are not necessary because they love and trust one another. However, creating written agreements and not moving forward on oral agreements may be wise. Because relationships can easily change, having hard copies of contracts and terms may prove useful in the event that the marriage does not last and couples find themselves having to divvy up the business.

Business owners facing divorce or even those who are considering marriage may want to take the time to ensure that are not putting their businesses at risk. Some may think that a change in relationship status will not significantly impact their companies, but in reality, property division and other proceedings could easily impact business operation. Therefore, California business owners may want to ensure that they understand their options for protecting their business interests.

Source: bizjournals.com, "17 New Year's resolutions for entrepreneurs", David G. Bates, Jan. 22, 2018

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