To be happily married without a care in the world, and to live out your vows the way you truly intended is a blessing. Yet, not all married couples were destined to walk this path together. A divorce is a financially, emotionally, and psychologically stressful ordeal, but the matter becomes even more complicated when the time comes to decide who gets to keep the business, and to what extent. The entire process can be legally challenging to say the least, so here are the five steps you want to take if you want to prevent your divorce ruining your business for good.
Is your business a marital asset?
Firstly, you will need to determine the size of the marital estate. Is your business an asset that falls under that estate? If so, your spouse will be entitled to a fair share. If you have established or acquired the business while married, then the property will be categorized as a marital asset.
Even if that isn’t the case, your spouse will still be entitled to appropriate compensation, per the governing marital laws in your country or state. Be sure to categorize any assets you might have on the side, such as real estate or other investments, as they will play vital roles in determining the scale of your settlement.
Get your lawyers involved from the start
Peace talks are always preferred in a situation like this, but that doesn’t mean that these proceedings should be kept strictly between you and your spouse. This becomes especially important in countries such as Australia that have strict marital laws.
In the Land Down Under, business owners undergoing a divorce need to have legal representation involved from the start, obtaining reliable family lawyers in Sydney and across the country in order to stay compliant with the governing regulations no matter the state or province they are in. This ensures that no legal loopholes are exploited by the other party, and prevents the matter from going to court – a situation in which you will be at the mercy of the judge.
Determine the value of the business
When dividing up the business, or considering buying it out, or even getting bought out by your spouse, one of the most important things is to know exactly how much the asset is worth. Evaluating the business via professional methods is a concrete way to prevent settling for less than you deserve, or paying way more than you should.
Someone will need to sell their share
There certainly are instances in which a divorced couple may be able to continue running a business after a divorce, but the practice is highly discouraged, especially if your divorce is a product of bad blood and a lack of understanding in your personal life. The troubles of your marriage are bound to seep into your business, which is why it’s important for one party to sell their share of the asset to the other and move on to bigger and better things.
Keep the business operating nominally
Once the divorce has been finalized, and you have reached an agreement as to how your business should be divided, it’s time to assume control and prevent any setbacks this situation might cause. While you might have had a different dream for the company all along, it’s important to preserve winning practices in order to ensure cash flow and solvency, while gradually altering the course and reinventing the brand.
A divorce can be an arduous process, especially if children and livelihoods are involved. If you have a company that is a marital asset, the last thing you want to do is to tackle this challenge alone. Follow these five steps in order to make the process as pain-free and mutually-beneficial as possible.