It can happen to anyone. While an entrepreneur is building a new business, a marriage falls apart. If you are in this situation, you must take some steps to protect your company. Otherwise, you may find yourself battling to keep your business from being sold or your ex ending up as your business partner.
Is your marriage heading for a split? Here are some strategies to preserve your company in the event of a divorce.
1. Keep good records
Along with being a sensible business practice in any situation, good records may save your business if your marriage breaks up. The most important thing is to separate your business and family finances. For example, avoid borrowing from your joint account to purchase a company vehicle.
2. Pay yourself right
You may assume paying yourself a lower salary will benefit you in the event of a divorce. If you keep the cash flow out of the family, your spouse may claim he or she deserves more assets. It is crucial to have a competitive salary to avoid this.
3. Receive an objective valuation
In order to have a fair property division process, you will need to get a neutral professional to determine the value of your company. The valuation should be based on current revenue. Avoid getting two different valuations, as this will be unnecessarily expensive.
4. Offer other assets
When your divorce proceedings are underway, your spouse may fight tooth and nail to get a stake in your company. However, this does not necessarily need to happen. You may be able to keep complete ownership of your business by sacrificing other assets, such as cars, collectibles, retirement accounts or the family home.
If you follow these tips to preserve your company, it may remain intact after the divorce is complete. You should also get an attorney who handles complex property division.