If divorce is inevitable, it may be necessary to revisit your business documents. How is the ownership going to change? Do your LLC agreement or corporate documents properly deal with the concept of divorce? Is there a mechanism in place to make sure that the ex-spouse doesn’t become a part owner or take control of the business? Make sure that you understand what is going on in those documents and how your divorce is going to affect it.
If you are not sure, it is time to revisit that. Start negotiations, separate from the divorce, on how your business is going to look after the divorce with your ex- spouse, as well as others involved in the business.
What about the long-term impacts on the business? Does one ex-spouse want to become a passive investor, or do both of them want to have active management control?
It can be awkward from a business management standpoint to have both people continuing to own and to be involved. It may be necessary to reallocate property or to consolidate the ownership of the business in one spouse.
If divorce is coming into your life for whatever reason, it’s time to go back and look at your business documents and make sure that you are prepared.
What has been your experience? Have you seen businesses ravaged by divorce? If this has happened to you, what would you do differently in the future? Join us in the comments below and let us know about your thoughts and experiences.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Freeimages.com/Photographer George Bosela.
About the Author
Shawn McBride — R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride or call (214) 418-0258.
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