When you own your own business, your divorce may look markedly different than it does for those who are employed by others. Once you decide to part ways with your spouse, though, you must figure out how your business factors in as well as whether you owe your former partner any stake in it.
According to Forbes, you may be able to help protect your business interests amid divorce in a formal way, which might include having a carefully crafted contract in place. Conversely, you may be able to do so in an informal way by putting other plans or practices in place preemptively.
The contract option
If you choose to protect your business by creating a prenuptial or postnuptial agreement, the contents of that agreement may vary based on your ex’s level of involvement within your business. If your ex has no direct involvement, you may want to stipulate that your company is your sole property and therefore not eligible for division between you.
If your ex had a role in your business’s success after you married, you may want to dictate that he or she is due only a share of the profits generated after you tied the knot.
In the absence of a prenuptial or postnuptial agreement, consider taking steps to establish your self the sole owner of the business. This does not necessarily mean that your ex should not receive anything. Instead, if your ex was involved in your business in some capacity, you may want to give this person a one-time cash-out, rather than ownership rights, over your business.
Regardless of what route you take to help protect your business interests, make sure to keep extensive documentation of cash transactions and business expenses. The more documentation you have available to you that helps prove your case, the better your chances of a favorable outcome.