- Marriage dissolution can financially impact a business due to ownership changes, customer and staff relations, and legal proceedings.
- Before taking any steps, you must have an open conversation with your spouse about the situation and discuss goals & priorities.
- Seek legal advice from a lawyer experienced in handling divorces involving businesses.
- Gather the necessary financial documents to understand the value of the business.
- Hire a professional business appraiser to perform an independent valuation.
Marriage dissolution can be a trying time for anyone, especially if you are a business owner. When going through a divorce, you have to worry about your personal life, and contemplate how this major life event can affect your business.
The legal process of divorce has various facets which can have long-lasting effects on your business. Here’s how divorce affects firms and what you can do to minimize the damage.
When going through a divorce, your business can take a significant hit timely if you do not have adequate legal structures. Your ex-spouse may have a claim on the company that you own or co-own and may ask to be compensated for this. This may take considerable money from your business, which can result in losses and affect the company’s running.
A divorce can also affect ownership of your business. In cases where both parties have shares in the industry, the legal proceedings of the divorce may cater to the division of these shares. For example, a judge may ask for the sale of the company and the proceeds to be shared amongst both parties. As such, you may no longer be able to make decisions about running your business until the finances related to the business’s shares are worked out.
Customer & Staff Relations
Going through a divorce can be emotionally exhausting, and this is likely to affect your customers and staff, which may cause them to lose trust in your business if multiple rumors circulate. A company is only as good as its relationship with its customers and staff; therefore, your business may suffer if it becomes strained due to a divorce.
Legal Proceedings and Business Continuity
The legal proceedings of a divorce can take a toll on your business’s continuity. Meetings with lawyers, being in court, and the preparation that comes with this can compromise your time and attention on what matters – ensuring your business runs smoothly. A divorce can also cause you to lose focus and energy from running your business, compromising the business’s progress in meeting targets or deadlines.
The Proper Steps to Take
It can be challenging to separate personal and professional affairs, but there are ways to navigate this process. Here are a few tips:
Talk to Your Spouse
Before taking any steps, having an open and honest conversation with your spouse about the situation is essential. Discuss what you both want from the business and the divorce. Determine your goals and priorities and what you are willing to compromise on. Communication is vital to finding an amicable solution that works for both parties.
Seek Legal Help
The next step is to seek legal advice from a lawyer experienced in handling divorces involving businesses. As such, a reputable contested divorce attorney should be hired to help navigate the legal proceedings and guide you in making responsible decisions. These experts can provide invaluable help in the process and protect your legal rights.
Get Your Finances in Order
When you own a business with your spouse, it can be challenging to separate your financial affairs. In preparation for the divorce, it’s essential to get your finances in order. Gather all the necessary financial documents, such as tax returns, bank statements, and business records. This will help you understand the value of the business and determine how to divide its assets.
Determine the Business’s Value
Determining the value of the business can be a complicated process, especially if you and your spouse have different ideas about its worth. Hiring a professional business appraiser may be necessary to perform an independent valuation. An appraiser can provide an impartial assessment of the business’s value, which can help you negotiate a fair settlement.
While marriage dissolution can be a trying time, you can brace yourself to lessen its impact on your business. Ensure that proper legal structures are in place, have adequate insurance coverage, and if possible, try and reach an agreement with your ex-spouse before going to court. Ultimately, remaining calm and collected during a divorce will only lead to the best outcomes for your business, and it will go a long way in ensuring that your life recovers and gets better.