If you are in the formation stages of starting a business or have been in charge of one in Minnetonka for a long time, it helps if you take measures to protect it. Believe it or not, your relationship can affect your company if things end badly between you and your spouse. Divorce is one situation that can cost you your business if you are not careful.
Even if you are single now, it is crucial for you to make provisions to protect your company in advance of marriage. The more effort you put into shielding your company from a nasty divorce, the easier it will be for you and it to make it through the process unscathed.
Get things in order
You do not need to have gone through the divorce process to create a plan for protection. It may help if you think of the situation as a merger or business acquisition so you can better prepare. Determine how much of a financial stake your spouse may have in your company. Take an inventory of all business assets and debts. Get your financial documents in order and make sure they are up-to-date.
Get a prenuptial contract
A prenuptial agreement can help keep things from becoming messy between you and your partner. In this contract, you should specify if the business is marital or personal property. You should also specify how to treat its income and who is to assume responsibility for any debts it incurs. Use the prenuptial agreement to offer your spouse other assets, such as real estate, vehicles and other property in exchange for her or his claim to your business.
Avoid mixing personal and business finances
It may seem tempting for you to use personal funds when you need to infuse your company with some cash flow, but mixing personal and business finances can create many complications that can prolong your divorce and affect your company.
Divorces are often messy enough without having to add a business into the mix. Take precautions to protect yours so you do not lose it.