Wednesday, November 19, 2008

Checklist for How Divorce Might Affect Your Business

From Startups comes a pretty good article on divorce and business, How does divorce affect your business?:

"A cynic might say “stay single”. However, only a real miser would prefer such a cold and unromantic view. If you are not married but have built up a valuable business, you could consider a Pre-Nuptial Agreement to protect your wealth should the marriage not last.

Whilst not enshrined as binding in law, courts are certainly highly likely to take them into account in distributing assets in a divorce providing each party was properly advised, gave full disclosure, did not apply pressure and understood the nature of the agreement.

Whether your fiancée will appreciate a pre-nuptial agreement will have to be left to your judgment. Although given the cost and heartache that hostile divorces involve, a well thought out agreement that both people see as fair should avoid subsequent heartache should your marriage end."


To consider checklist:

  • Can the business be operated without the involvement of both parties?
  • If only one party is involved, can the other be confident that the business will be run in an open and honest manner?
  • Can a “clean break” be funded either immediately or on a safe and secure deferred basis?
  • How will the staff react to the divorce?
  • Has an independent and commercially realistic view of how to resolve the business issues been obtained?
Divorce greatly impacts a business (and I wrote about in this post here). Be ready for it - whether you are part of the business or married to the one who is part of the business.

No comments: