If you operate a small business in Tennessee, losing control of it during a divorce can be devastating. You can protect your business by being proactive and understanding options for protecting your finances during a divorce.
Starting early is best
When you currently run a small business and decide to get married, begin the process of protecting your business. You may need to research several elements, which can include the following:
- State laws
- Business types
- Legal structure of your business
- The role of your spouse or partner in the company
Starting this process as soon as possible lets you tackle each situation and choose the appropriate route to help you stay protected if a divorce occurs.
If you’re getting married and own a small company, protecting your full ownership is important. While you don’t plan on getting divorced, this outcome occurs regularly with many individuals. Determining how property will be separated before you tie the knot is the safest path.
You can use a postnuptial agreement when you’re married to determine how your assets will be divided if you get divorced. If you have a prenuptial agreement, a postnuptial agreement can be used to update your existing prenup.
Utilize all of your options
You can protect your business in other ways that don’t include getting a prenup or postnup agreement. LLCs, partnerships and buy/sell agreements allow you to include provisions that protect you and other business owners if a divorce occurs. Requiring unmarried shareholders to provide the business with a prenup or not permitting the transfer of shares without 100 percent approval from other business partners are ways to protect each business owner.
Building a business is a lot of work. When possible, protect yourself before getting married. Knowing you can also protect your interest in your business after you’re married should bring peace of mind.