Friday, 26 August 2011

Protecting Your Business in a Divorce

Business owners may have special concerns during a divorce. In a community property state like California, spouses in a divorce are normally entitled to half of the assets accumulated during the marriage. In practical terms, those assets could easily include your business. has tips for entrepreneurs who want to protect their business from harm during a divorce. In most divorces that involve division of a business, California divorce lawyers often see that the venture was begun by one of the spouses early in the marriage. Over a period of time however, the value of the business increased, along with the spouse’s stake in it. That's why even small business owners or those who are just starting out on a new venture, need to divorce-proof their business.

One of the most important things you could do is to maintain separate financial records for business and personal purposes.

If your spouse has a role to play in your business, eliminate that as quickly as possible. You may not be considering a divorce right now, but the longer a spouse has worked in the business and the more he or she is involved in it, the easier it is for a California divorce lawyer to prove that the spouse contributed substantially to the success of the enterprise.

When it comes to dividing assets in the divorce, try to retain 100% ownership of your business, and sacrifice other assets, like retirement accounts, and homes. Otherwise, you may be in the unenviable position of having to take on your ex-spouse as a business partner.

If it does come down to dividing the business, try to buy your spouse’s share of the business over a period of time, through monthly installments.

You should also get an impartial, neutral third party to conduct a fair valuation of your business during divorce proceedings.


  1. Definitely divorce would be an unwanted happening in one's life. But expecting a divorce, stalling spouse's involvement in business means ridiculing the relationship itself. Then the relationship will be business like with no real love. In case of divorce buying the spouse's business share is a good advice.
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  2. So happy to support your organization.
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