Divorce Concerns for Business Owners
April 3, 2020
As a Pennsylvania business owner, you may have dedicated countless hours of work to build your company. When you are involved in a small business, the road to success can also be a family effort that brings everyone together. However, when divorce is on the horizon, you may worry about the future of your business. After all, some investors require startup owners to include a prenuptial or post-nuptial agreement before they will take a stake in a promising company, due to the threat divorce may pose to its future. However, you can emerge successfully with your company intact.
When One Spouse Wants to Leave
When both spouses are involved in a privately held company, they are not just romantic partners but also business ones. When the personal relationship comes to an end, they may need to reexamine their business relationship. In many cases, one spouse is the primary driver of the company, and the other spouse may wish to leave the business as well as the marriage. A property division settlement may address this issue. The spouse leaving the company may receive larger amounts of other marital assets, such as the family home or an investment account, in exchange for their share of the business.
If Cash Flow Is a Challenge
Your business may be worth far more than your other assets, however. In this case, you may want to consider a gradual agreement to buy out your spouse over time. Their equity stake in the company would decline as the buyout proceeds. In other cases, you may want to establish a holding period, where the buyout could take place in a set number of years. The divorce settlement could include provisions for how business decisions will be made during this interim period.
As a business owner, keeping your company stable can be important, even while you go through a divorce. A family law attorney may help you to negotiate a fair settlement on legal matters, including property division and spousal support, that can help protect your business moving forward.