Some people say that business owners are essentially married to the organizations that they operate. After all, they may work incredibly long hours and dedicate a substantial amount of mental effort toward the success and development of the organizations they own. The focus on establishing and developing a small business can lead to losses in other areas of life. In some cases, business owners may find themselves facing divorce. The strain of business management may even contribute to that decision, in some cases.
Business owners facing the prospect of divorce often worry about what may happen to the business in which they have invested so much. There are three major considerations that business owners need to tackle when responding to a divorce filing or preparing for one.
Protecting the company’s operations
Sometimes, disputes about valuable marital property can lead to highly unfavorable outcomes. Someone might need to liquidate business resources as a means of compensating their spouse. Therefore, business owners often need to look carefully at the circumstances to determine how much of the business’s value could be at risk and to strategize to protect the organization so that it remains solvent throughout and after the divorce.
Ensuring financial transparency
People often think of businesses as an easy way of hiding assets or capital. Therefore, it is of the utmost importance that business owners be as transparent and honest as possible when making disclosures about their business. From accurate information about projected revenue to realistic values for business resources affected by depreciation and use, there are many details that can cause conflict and lead to suspicion during divorces involving a business.
Avoiding the double dip
Oftentimes, the business valuation process involves looking at the future revenue a company might generate. A spouse may then point to that revenue as a source of income and then request alimony or spousal maintenance. This double-dip into future business income can put a business owner at a disadvantage. Properly accounting for future business revenue and personal income when addressing support and property division matters is of the utmost importance.
Business owners often need the help of an experienced legal professional. Preparing thoroughly can make a major difference for those hoping to preserve their investment in a company as they prepare for divorce.