This guide outlines the 8 key things that you should understand as a woman business owner when it comes to getting a divorce, or even getting married.
As a woman business owner, getting a divorce can feel especially worrisome. Not only are you dealing with the emotional anguish of separating from your spouse, but you are also concerned about the future of your business. If you are facing the prospect of divorce or are in the midst of it, becoming more informed about the financial settlement process will help prepare you if you want to protect your business.
Be prepared in getting a divorce
In this article, we walk you through eight different things you should know about as a business owner getting a divorce.
It’s wise to get things in place with your spouse before you marry
Discussing getting a divorce before you get married is not the most intuitive topic of conversation, but it can be essential if you have a business. Talk over what would happen to your company if you were to separate, and think about what percentage share you would get from the business if you were to split.
Think about what the value of the business is at the time of getting married, and consider how your new spouse will get paid from the business – will they get shares or a salary? Or will you keep your financial affairs separate from the business? These are all important matters to consider, so think about them first before you have the chat.
You can make things official with a prenuptial agreement…
Once you are both happy with the details, you can draw up a prenuptial agreement to make the deal is sealed. Although pre-nuptials are not legally binding, they can hold weight with a judge when negotiating financial settlements in getting a divorce.
In the agreement, specify how much your spouse would receive hypothetically, include timeframes, and highlight nonfinancial and financial contributions each partner makes to the marriage.
…or get a post-nuptial agreement
If you are already married, then you can still help to secure the future of your business with a post-nuptial agreement. Within this, you can specify the same details as a pre-nup, providing both parties agree on the terms.
Like pre-nuptial contracts, post-nuptial agreements can ensure individual assets are kept separate when getting a divorce, and not considered as part of the martial pot. They can be written at any time during your marriage and have the same value as a pre-nup in the event of a divorce.
Businesses start off with a 50:50 split
Initially, courts will consider joint matrimonial assets as a 50:50 split when getting a divorce. This evaluation will include all property, investments and pensions, as well as your business. They will also take child maintenance needs into account as a primary concern.
While courts will always try to keep businesses with their owners, other financial assets can determine whether your company should be split or a portion allocated to your ex. If your ex-partner is entitled to some of your business (perhaps they are a shareholder or employee) you may want to consider assigning a larger percentage share of the family home or a pension to them, for example.
Running your own business can be advantageous if you have your own company
If you have children, then you may be concerned that a court will view your position as a company owner in a negative light when getting a divorce. You may worry that managing your own business gives the impression that you are not as available for your children.
However, it’s important to emphasise that being your own boss allows increased flexibility and the ability to adjust your timetable to fit in with your children’s. More and more are growing to accept the benefits of flexible working patterns and working from home, so this could bode well in your favour.
It’s worth getting the company valued
Getting an accurate valuation of your business will also help keep you informed and able to make the best decisions when getting a divorce. A professional business appraiser or accountant will be able to do this.
During a business valuation, various assessment methods are adopted, including looking at the sale value of similar businesses, all company assets, cash flow, forecasts, profits and revenues. A valuer will also look at contributions made to the business by both partners.
You need to be prepared
If you are thinking about getting a divorce then it is a good idea to get prepared now. It’s much better to have knowledge of the facts and the law beforehand, to avoid unpleasant surprises and to help you plan for the best outcome for you and your company.
Having a plan before you have the discussion about divorce is always better. Think about the structure of your company and how it could be impacted. Make sure everything is documented.
Consider the best outcome for you
Finally, take time to think about what would be the best eventuality for you if getting a divorce. When your business feels in jeopardy, it can feel very emotional. A business is not only a place to work, but a ‘baby’ you decided to create and grow. Something you have sacrificed for to get to where it is now. The prospect of dividing it can therefore be very difficult. Give yourself time and educate yourself on the divorce process and associated financial matters to prepare yourself in making the best decisions for the future of your business.
Finally…
If you are considering a divorce, and are uncertain of how your business could be affected, then it is wise to get in touch with a qualified family lawyer who will help guide you through the process and clarify the facts relating to your specific circumstances.
