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Protecting your business from marital or divorce-related disputes

Sometimes the personal aspects of someone’s life can have a detrimental impact on their professional success. For owners of a business in Ohio, there is a great deal of risk associated with mixing business and personal life if one could potentially derail the other.

If you are thinking of launching a new business venture or are currently the owner of a business, consider some ways to mitigate the chances of a personal problem morphing into a professional one. For example, businesses with multiple owners need to consider what could happen if one owner gets a divorce.

Is the business subject to division of assets? Could a soon to be ex argue that the ownership of the business is a communal marital asset? Both current and potential future business owners should consider how insulated the company is against this kind of professional jeopardy.

For those in the planning stages

Individuals or groups considering a new business opportunity can take essential steps during the formation process to help protect their business down the line. Choosing a business structure with limited personal liability is one way of protecting your personal life from the fluctuations of business. On the other side, there are contracts or agreements for spouses to help differentiate between communal and individual property.

A prenuptial agreement can help business owners define their sole ownership of a business in the course of a marriage. For already married entrepreneurs, a postnuptial agreement can also help insulate the business from potential personal disputes as you set off on this new course.

While it can seem intimidating or uncomfortable to ask a current or future spouse for an agreement of this kind, the reality is that it can be the best course of action for your company’s needs. This is also a way to present the conversation to a loved one, which can help ease any tensions around this issue. It’s a professional caution, not indicative of your relationship.

For those already in business

Current business owners can also protect the company from asset division. Consider some general steps for keeping the marriage and business separate. First, don’t mix personal and business finances. Keep records of all financial happenings and avoid sacrificing your family’s income for the sake of the business.

If you’re already into divorce proceedings, consider prioritizing the business ownership and sacrifice some other assets in the division process. This may be an unfulfilling course of action, which is why the previous preemptive steps can help business owners avoid this kind of sacrifice.

Your personal and professional lives may inherently comingle at times, but neither should be detrimental to the other. Consider your personal and professional goals before, during and after going into business or into a new relationship.

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