What business partners should discuss if one is facing a divorce

On Behalf of | Sep 4, 2020 | Business Law

Divorces can shake up a lot of things in your life. Perhaps most notable of these is your family structure. What about your company, though? The end of your marriage may adversely impact your relationship with your business partner and cause your partnership to crumble.

Unless you signed a prenup before marriage (or a postnup after) that protects your business, you’ll need to prepare your business partner for what’s to come as your divorce unfolds if you didn’t sign a prenup before getting married. You’ll want to start by pulling your partnership agreement to see exactly what the agreement may say about your ownership rights. If you received reliable counsel when setting up your partnership, you might have a contingency agreement. This type of contract generally spells out what happens with your interests in the business if a life-changing event happened to either one of you.

Another situation that you need to prepare your business partner for is if your ex’s attorney or family law judge orders your company’s valuation. A forensic accountant will likely need to comb through your profits and losses and tax returns to see what your business is worth so they’ll know what your spouse may be eligible to receive.

You also need to prepare your business partner for having to potentially testify in court to authenticate your partnership agreement, both of your ownership stakes in the company and financial statements. A business law attorney can advise you on protecting your interests when both your marriage and your partnership seems to be crumbling right in front of you.