If you’re married and you’re coming up to the point where you might be getting a divorce soon, it’s a great time to revisit your business documents. You need to understand what’s going on in those documents and how your divorce is going to affect it. How is the ownership going to change? Does you LLC agreement or corporate documents properly deal with the concept of divorce? Does it have a mechanism in place to make sure that the ex-spouse doesn’t become a part owner of the business or doesn’t take control of the business?
If not, you probably want to revisit that. You also want to start negotiations, separate from the divorce, on how the business is going to look after the divorce with your spouse and others involved in your business.
This may be a great time to reallocate property or to consolidate the ownership of the business in one of the spouses so that both ex-spouses don’t continue to own the business after divorce. As you can imagine it can be awkward from a business management standpoint having both ex-spouses involved.
You’ll also want to think about the long-term impacts on the business. Does one of the ex-spouses want to become a passive investor or do both want to have active management control?
If divorce is coming into your life for whatever reason, it’s a great time to go back and look at your business documents and make sure you’re prepared.
What’s been your experience? Have you seen businesses ravaged by divorce? What would you do differently in the future? Join us in the comments below and let us know about your thoughts and experience.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Each case is unique. Past results do not guarantee future outcomes. Freeimages.com/photographer Milda K.
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Posted In: Business ManagementAbout the AuthorR. Shawn McBride — is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride Law Firm or call (214) 418-0258.