Vietnamese residents of California who own businesses are among the hardest working. However, if you’re getting a divorce, you should know how it can affect your company.
It can disrupt daily operations
Even if you and your spouse don’t co-own the business, your impending divorce can disrupt daily operations. Even if your divorce is amicable, you might have difficulty keeping up with your business as you focus on the divorce.
Co-owning the business
As California is a community property state, you might worry that your spouse could become a co-owner of the business if it has to be split between you. However, if they aren’t already a co-owner, you don’t have to worry about this. You might have to share a portion of the value of the business as part of the divorce settlement.
Buying it out
If you and your spouse co-own the business, you might want to consider a buyout. This allows one of you to leave the business but receive your fair share of it as the other pay to buy them out. In some cases, this can work out. If your split is amicable, you could probably work things out together through divorce mediation or collaborative divorce.
Selling the business
Selling the business might be the best option if your divorce is contentious. If you can’t come to a fair agreement on a buyout, selling the business for a profit and then splitting that profit as part of your settlement might be a good course of action.
Options for protecting your business
It’s possible to protect your business in the event of a divorce. A prenuptial agreement could work, but you can only have one prior to your marriage. If you’re already married and worried about what could happen to your business, a postnuptial agreement might protect it.
A buy and sell agreement is another option for protecting your business if you go through a divorce.
Divorce is difficult, but it can complicate matters when you own a business. Fortunately, you have options to protect what you’ve built.