If you’re an entrepreneur, going through a divorce can be even more difficult than it already is. Your business is probably the most valuable asset you have, and it is never a good idea to put it at risk in the event of a divorce. Depending on the circumstances, there is even a chance that your spouse gets 50% of your business. Still, there are some things you can do to prevent this from happening. We have come up with 5 of them that might just help you retain full control of your business once the divorce is through.
Know when you are in Danger
It is of great importance to know when your spouse can claim the rights on a portion of your business so you can start preparing for it. For example, if he or she has been employed by your business, there’s a decent chance you will end up losing a certain percentage of it. Of course, the bigger role they played in the business, the higher the percentage they can claim rights on. This will also happen if your spouse helped you run the business or has played a part in coming up with any business ideas.
Fire Your Spouse
If you’re going through a divorce, you should think about firing your spouse as soon as possible if you don’t want to risk losing a large portion of it. The more important your spouse’s role in the business is and longer they stay in the business, the higher are the chances a lawyer will make a strong case that your spouse has helped the business grow and should benefit from it. Easing out someone you are married to (even if you won’t intend to stay married for much longer) can be hard, but it’s something you will have to do if you want to retain full rights to your business.
Do Not Reinvest Excessively
One of the biggest mistakes many entrepreneurs make is cutting their salary in order to have more money to reinvest in the business. In that case, your spouse can prove that you didn’t provide enough for the family and that they didn’t have any benefits from you owning a business. If this happens, you might just end up losing a portion of it. In order to safeguard against this, you should make sure you give yourself a proper salary and don’t reinvest too much.
Get Some Help
Even though most of these rules apply no matter where you live, there are some things that can differ depending on the laws in your state. For example, when you are filing for a divorce in Oregon, the court allows non-monetary property owned by one spouse to be divided among both spouses while this is not the case when filing for a divorce in California. That is why it’s always a good idea to contact the professionals who can give you all information on division of property in your state.
Buy out Your Spouses Portion
In some cases, you won’t be able to prevent your spouse from getting a portion of your business. That’s why it’s also a good idea to try to make a deal with your spouse and not have him or her as your business partner. You can offer your spouse cash or a portion of another property for their shares. This is a good idea if the two of you have separated on bad terms and don’t wish to stay in touch at all.
Make sure you try all of these things if you want the divorce to go as smoothly as possible. This is especially important if you have children and don’t want the divorce to have a negative impact on anyone.