No one ever likes to think of the end of their marriage when things are going well, but when it comes to business you may have to consider it. You have to allow the possibility that it could happen and prepare yourself for it. After all, the best form of protection is preparation for the unexpected – think of it like your public liability, contents, vehicle and product insurance – you’re just protecting yourself again potential risk.
However, regardless of how much you prepare, in reality divorce is something that comes up and slaps you in the face. And that unexpected pain can also have a huge impact on your business – from the entire direction and overall goals of the company through to the day-to-day activities. Ultimately the business can suffer.
So how do you protect your business from the shock of divorce?
Think about a prenup
Not many people know this but a prenuptial agreement doesn’t have to be set in place before the marriage begins. In fact, it can be set in place before, during or even whilst the marriage is ending. Think of it like an insurance policy covering your business and finances.
Whatever stage you’re in, a discussion about a financial agreement is going to be a very difficult one and there are some potential complications with this, especially if you started the business during the course of your marriage. As soon as you start to think about whether this could be an option for you, you should approach a family lawyer for some expert advice.
Try to minimise interruptions
Whether you’re an SME or a Sole Trader working from an office in your home, a separation or divorce could significantly disrupt your business and livelihood. It will be a big change that will more than likely cause disruptions to business continuity, staff morale and reputation. Therefore, you should try to find as much stability as you can to minimise interruptions on the day-to-day operations. Things such as securing a new place to work if you’ve been working from the family home, or making sure you have trusted staff in place to run the business if you have to spend some time away.
Make sure everything’s in order
Many spouses support and contribute to their partner’s business in the early years, especially if hiring staff is not an option. When you’re in the throes of a good marriage this can feel completely natural however, it does make it slightly more complicated if you start to have to divide assets. Try to clearly outline and prove what each of you have contributed over the years because once you start negotiating a settlement, all assets, income, profits and interest earned by the both of you will become relevant.
Get the business valued regularly
Just like a prenup, this can be done at any time and will ensure you’re prepared should you separate. This will help situations where one party wants to buy the other out or both decide to close and sell the business off.
Article provided by Australian Family Lawyers