As a business owner, you worked hard to establish and build your company. You likely want to protect it, but you may not think that you need to protect it from your spouse. That changes if you’re served divorce papers.
Making sure that you take appropriate steps immediately when you get the papers can help to protect the company. Avoid making any rash moves, such as suddenly taking money out of business accounts or selling off assets. Instead, respond in a calm, organized and thoughtful manner.
Seek an attorney familiar with business divorces
Your first step should be to consult with an attorney who’s familiar with business owners who are going through a divorce. This is your chance to get more than just general information about what steps you should take.
Secure and organize financial records
Business records will likely become central in the divorce. These include:
- Ownership agreements
- Loan documents
- Invoices
- Records of distributions
- Tax returns
- Profit and loss statements
- Balance sheets
- Bank records
- Payroll information
These all help to show how the business operates, including how it earns money and what it owes. They should also show that the business finances are separated from the marital finances.
Secure the financial records, which may involve making copies or saving them digitally. Being able to produce the records quickly when required is beneficial and may reduce delays in the divorce.
Protect the value of your business
A business isn’t valued by the balance in the commercial checking account. Valuation may consider revenue, assets, liabilities, market conditions, ownership restrictions and future earning capacity. The type of business you have determines how it should be reviewed. Service businesses require a very different process than a professional practice or goods-related business.
Your business isn’t the only factor that you need to handle during a divorce. It’s critical that you take steps to protect yourself and your personal interests. Working with someone who’s familiar with matters similar to your divorce and who can consider the specific circumstances of your case is beneficial.