As a Jersey City business owner, you’d do anything to protect your enterprise. This includes safeguarding your business from divorce, which is unfortunately a very real possibility for many couples out there. Inc. explains a few of the options available to entrepreneurs to ensure their businesses stay intact when faced with divorce proceedings.
All business owners should have a solid premarital agreement in place before getting married. While it can be difficult to broach the topic with the person you love, it’s essential to have tough conversations about finances well before your nuptials. A premarital agreement will explicitly state who owns what going into a marriage, which prevents your spouse from claiming ownership in your business should you divorce.
If you’re already married, there are other steps you can take. Spouses are able to claim assets or even stakes in businesses when they have involvement. This can be involvement through funding or just helping out with operations. If you suspect divorce is looming on the horizon, start limiting your spouse’s involvement now. It’s also preferred that you can show business and personal funds were kept separate for the duration of the marriage. You do this by establishing separate financial accounts for your business and your personal life.
If the court determines your business or its assets are up for grabs, you’ll need to make a valuation regarding its worth. In this case, calculate the book value instead of the market value by taking an accounting of the business’s worth right now. Conversely, market value is how much the business could be worth if it were sold, which in some cases could be much greater. Your legal team will be able to counsel you on the best course of action regarding valuation.