Married As Well As Business Partners? Take These Steps To Mitigate The Risks Of A Split
Quite often, we hear about couples who are not just life partners but business partners as well. At times working with your spouse could be the best thing to do for your marriage as well as your business. But, there are also instances where things go sour between couples, leading to a split. These couples then resort to legal help to get a divorce and sort their distribution of assets. However, at the time of divorce, it can be difficult for most couples to have a rational approach towards their business. It is, therefore, a wise move to pre-determine your course of action if you and your spouse end up splitting. Here are a few steps that could go a long way in ensuring the best interests of your business in the event of a divorce.
Include your Business in your Prenup Agreement
A prenup agreement is like your shield that will ensure that both ex-partners get their rightful share of the assets and responsibilities. The prenup can set some terms and conditions for both the partners in the event of a divorce. In this case, the financial clauses you include in your prenup could have a major impact on the future your business.
Define your Business Assets: Firstly, make sure your prenup includes all the assets you and your partner jointly own. This could be your office space, the shares of the company, the capital involved in the business, etc.
Ownership of Property: Mutually decide, in case of a marriage split, who will own what. If you were the one who set up the company, then you would probably even want to completely nullify the partnership if you and your spouse get a divorce.
Property Division: Peacefully establish who will own what.
Include Relevant Clauses in your Partnership Agreement
Planning your partnership agreement well is extremely crucial to avoid murky scenarios in the event of a divorce. It might seem cynical to do so at first, but it helps to be pragmatic and include relevant clauses in your partnership agreement in case you and your spouse split.
The best approach to go about this is to consider various scenarios and be prepared for it.
Scenario 1: Both parties decide to work together even after the split.
Technically, this could be the best scenario, as it will have a minimal effect on the functioning of your business. But, you will have to make sure that you and your spouse have the mutual understanding to not bring your personal differences to work.
Scenario 2: After the split you and your ex-spouse cum business partner decide to handle different verticals of the business.
Considering how much time, effort, and resources you would have invested in your company, this option of a partial split could be a reasonable solution for your business.
Scenario 3: Post the split, only one partner will take over the firm
In a scenarios like this, you might want to take full ownership of the firm and pay the necessary compensation to the other partner depending on his or her share in the company. You could also settle for paying alimony to the other who leaves the business.
Take Legal help
Confused as to what clauses to include in your contract? Consider taking legal help from a reputed law firm in your neighborhood. A lawyer will be in a better position to think things more practically at a time when you are in your romantic bubble planning to get married.