How Can You Protect Your Small Business During a Divorce?
When you get divorced, you may have to divide some of your assets with your spouse. And if you run your own small business, part of the property division process could include dividing your business.
There are 31.7 million small businesses in the U.S., and many of these are family-run operations. If you want to protect your small business during the divorce process, the following strategies may help.
Maintain Comprehensive Records
Gather all paperwork relevant to your business’ operation, including recent transactions, tax documents from prior years and any licenses you possess. In addition to these documents, compile any other records that can prove your financial history and ownership of your business.
Obtain a Secondary Valuation
During the divorce process, you may need to have an appraisal done on your business and its future revenue projections. Consider the valuation done by the professional assigned to your case and then obtain another valuation through a neutral third party.
Remove Your Spouse from Operations
If your spouse helps with your business, either in a major or minor form, take steps to remove him or her from these operations. Take the same steps you would with anyone else involved with the company and talk to your HR manager about effectively managing the termination process.
There are many things that can happen when you divide a business during divorce. If, for example, you cannot come to an agreement with your ex, the court may order you to split the proceeds from the sale of the business, award both you and your spouse part of the business or award the business to one spouse while the other receives ownership interest.