Divorce is seldom easy, whether you are the one to initiate it or not, which is why hiring the services of a divorce or family lawyer to assist you is highly recommended. Along with multiple other aspects of your life, you should also expect the divorce to take a toll on your business as well, which is what often makes everything so much worse. That being said, awareness is the first step towards developing a solution, which is why we are going to explain the most severe impacts that a divorce can have on your business, and how.
Disruption is an impact of divorce on business that can manifest in various forms. Some common examples are as follows.
- Due to social, psychological and/legal impacts of a divorce, you are quite likely to be distracted from regular work
- Your attention and time will be taken up to at least some extent by court hearings and phone calls
- Phone calls will be frequently made to and from your partner’s lawyer, your own lawyer, the business appraiser, relatives, and your (soon to be ex) partner
- Employees may be distracted from their main work in order to accommodate the various demands of the business appraiser
- Business appraisers will often actively distract your employees while trying to get a hold of your assets records, inventory details, tax returns, etc.
The very fact that you are about to get a divorce is sometimes sufficient enough to have a negative impact on your reputation, regardless of the situation’s reality. How cleanly you handle the divorce will determine how much of an impact the notion of divorce will have on your partners and key employees. Every business leader with a reputation to manage will prefer it if they can keep the divorce-related interruptions to their business to a minimum. In other words, the more visible your divorce feels to others, the more your business and stocks will suffer because of the divorce. The Yaffa Family Law Group provides divorce attorneys that can help a family sort things out amicably.
As already mentioned, divorces can change the impression people have of you, but that is still superficial to an extent. What could really damage a business relationship between partners is division of property. To understand this potential danger that could ruin your entire business, think about how you are planning to pay your spouse; if there was no prenup then all your interests in the business are subject to division. There are two possible options and both are bad news for the other partners, especially if they are minority stockholders.
- You must sell your shares in order to pay your ex
- You must give your ex a large portion of the stocks, adding an extra, unwanted partner to the business
If you take the first option, this will bring down the value of your stocks quite significantly, at least for the time being. That will, of course, in turn, affect your partners financially.
On taking the second option and making your ex a business partner, you will be endangering the entire company, all your employees and your partners. The possibilities are quite high that without legal restraints in place, your ex will just sell their shares when the time is right for them. This could potentially shut the company down, result in a takeover or at least the business shrinking in size significantly.
Prevent a Divorce from Ruining Your Business
Get a prenuptial agreement which clearly states every clause of alimony and/or division of business, should the marriage come to an end. It might be an uncomfortable subject, but if your spouse really cares about you and not the money, then it should not be a problem.
On the other hand, if you are reading this while glancing at the divorce papers, you’ll want to be looking into damage control measures, since prevention is out of the equation at this time. Understand that there is no point in hiding registered assets records because a simple search on Public Records Reviews will reveal all of them to your ex, his/her lawyer and the business appraiser. In fact, trying to hide them will only make your situation worse than it already is.
Instead, use the assets records search to find out everything available about you online. Public Records Reviews can end up giving you a clear idea of what you need to disclose during the division, and what could be excluded without breaking the law. Additionally, perform an assets records search on your spouse as well to see if they are hiding anything that you are not aware of. If that turns out to be the situation, you could end up saving a lot of money and, more importantly, your business.
People usually do not like to think about divorce before getting married, but they should. Particularly so if one of them owns a profitable business or both share the ownership of a company.