3 Things You Should Know About Small Business: August 3
3. Here are ways to minimize the impact of divorce on your small business. Divorce is rarely easy, both in terms of financial and emotional effects the parties are subject to, but when one or both of the parties are business owners, the event could have a major impact on the business itself, particularly if there aren't agreements put in place ahead of time, Fox Business says.
The business is likely to be a part of the agreement for the distribution of assets in a divorce and likely subject to financial scrutiny and lost productivity as the business owner and possibly employees are taken away from daily tasks to gather information for the valuation. In a worst-case scenario, the business could even be sold in order to "pay the non-owner spouse his or her share of the business," the Fox article says, offering ways to avoid the impact of a divorce on the business.
First, if it's not obvious get legal counsel and one that has extensive experience with both personal and business aspects in divorce settlements.
However, before it even gets to the point of needing a lawyer, make sure that a prenuptial agreement or postnuptial agreement is created to predetermine asset distribution to protect the business. Beyond that, if there are multiple partners in the business, documents should be drawn up ahead of time to address a buyout or valuation if a divorce is filed, the article says.
If neither of these agreements exist, hire a joint financial expert to value the business, which could help streamline the process and keep costs down. You may want to enter into a confidentiality agreement to protect sensitive information, the article advises.
-- Written by Laurie Kulikowski in New York.
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