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How divorce can affect a business

On Behalf of | Oct 15, 2020 | Divorce |

Divorces are very common in Pennsylvania and around the country. Nationally, about 50% of marriages end in divorce. While most people understand the broad contours of that process, there are some nuances that can complicate it. For example, anyone who owns a business or works at a family business should understand that a marital split can affect their company, too.

Be prepared

One of the best courses of action any couple can take is to write a prenuptial agreement before the wedding. This isn’t predicting the worst. It’s more like an insurance policy. And it’s a good idea for the couple to work out these issues before they’re mad at each other. Working on a settlement while they still like each other can prevent hard feelings later on. A prenup can prevent surprises that will affect the business during a divorce.

Possible effects of divorce

When someone owns a business, or is a majority stockholder in one, they risk the business being subject to property division. This can potentially cause real problems. For example, if an ex-spouse receives half of your shares in a settlement, they may be able to exercise a lot of control as a voter. Offering to buy them out can be a prudent move.

Small business owners are advised to pay themselves a sufficient salary, even though many prefer to keep putting money back into the business. Paying yourself adequately can work in your favor should the marriage break up. An experienced attorney is, of course, the best source of information about these issues. Retaining a good divorce lawyer is the best way to help hard-working business people protect their assets.