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Keeping your divorce and your business separate

On Behalf of | Aug 5, 2022 | Business Law, Divorce |

Filing for a divorce in California can have a serious effect on the business that you own. This will be all the more true if your spouse also owns part of the company or is a senior member of the operation. The fact that you may have to keep working alongside a person you have just divorced can be tricky. There are a few ways you can get around it.

Divorce can cause difficulties in your business

Divorce is an issue that involves far more than just your personal life. Your ability to maintain your business may also be affected in a negative way. The person you have divorced may still have a strong say in the day-to-day running of the business. Part of the share of your profits may be due to them as a result of the settlement the court has mandated.

The worst thing that can happen is that the spouse you have divorced suddenly finds themselves becoming a partner in your business. This can cause a great deal of friction with your other partners. It may lead to a situation where the company begins to run in a dysfunctional manner due to not being able to deal with this most unwelcome situation.

Make sure your finances are kept separate

You need to be sure that the upcoming dissolution does not place you in personal, financial, or business difficulties. The best way to do this is to plan for such an event well in advance. Never get married without a prenup in place. This is an agreement that will protect your business. It will specify exactly what your partner will get in the event of a divorce.

You should also be sure to keep your finances as separate as you can. For example, you should never use any shared property, such as your home, to finance an investment. This will help to prevent any confusion over which assets belong to whom. Paying yourself a strong salary will leave less money available from which you would have to pay out a settlement.