On behalf of Kelly Law Office, LLC posted in high-asset divorce on Wednesday, September 2, 2020.
If you own your own company, you need to know that your divorce may negatively impact your bottom line and your business partner. Because your business may be considered a marital asset, your spouse may be able to stake a claim to it even if they’ve made minimal contributions to its value. Your divorce may also impact your business partner’s ownership stake in your company.
The court may require a business valuation to see how much your stake in the business is worth. The entity hired to perform this assessment may need to see profits and loss statements, your company’s tax returns and other highly-sensitive documents as part of this assessment process. That can disrupt your operations and cause problems with your partnership.
Your spouse might also request a payout of their interest in the company if there was no prenuptial or postnuptial agreement in place to protect your interests and your business partner’s interests.
You may find it most advantageous to use your stock shares to pay your spouse. Doing so may leave them with a significant ownership stake, and thus voting rights, in your business, though. Should you leave your company, your partner may find oneself running the firm with someone they didn’t select and who knows little about how things work.
Alternatively, you may have to liquidate your interest in your company to settle your divorce with your spouse. The downside to doing this is that it could take away significant operating capital from your company and the ownership rights to the business may change.
The time and attention you find yourself focusing on your unraveling marriage or divorce may take away your much-needed focus on growing your business as well. This shift in awareness may also cause your company to take a financial nosedive.
A divorce can be a scary situation on multiple levels. It may deprive you of your sense of stability in terms of your home life and may rob you of your ability to pay as much attention to your business as you otherwise would. The prospect of losing some of your interest in your Columbus company can be hard to process. An attorney can advise you of the steps that you can take to potentially make the split not hurt your wallet as much as it otherwise would.