As an entrepreneur in Massachusetts, protecting your business against all risks is crucial. However, many business owners neglect to safeguard their business against divorce, which can result in lost assets and ownership. Accordingly, Inc. recommends the following steps to ensure your enterprise remains protected even at the end of your marriage.
Create a prenuptial agreement
Before getting married, make sure you have a solid prenup in place. This document will state who owns which assets when going into a marriage while also stating that your spouse won’t make a claim on your business should you divorce. Prenuptial agreements can be awkward to discuss, but they’re a must to ensure you and your partner are on the same page.
Limit involvement in your business early
Companies that have a lot of spouse involvement, whether it’s financially or physically, tend to be up for grabs during a divorce. That’s why you should start limiting your spouse’s involvement now, particularly if there is trouble brewing in your marriage. Also, work to keep your personal and business finances separate. When finances are intermingled, your spouse will have a stronger case.
Value your business wisely
Despite your best efforts, your business may still wind up in play during a divorce. If so, be cautious about how you value your business if the court decides your spouse is entitled to a portion of the assets. For instance, you can provide the book value of your business, which is its actual worth minus any debts. The market value of your business is how much it could command on the open market, which might end up being a much higher figure.