Ending your marriage could have a significant impact on your Tennessee business, and this may be true whether or not you retain control of it after the divorce settlement is finalized. However, there are steps that you may be able to take to minimize the negative impact that a divorce might have on your firm.
There will likely be a period of uncertainty
It’s possible that you’ll be able to keep your divorce a secret until after it is finalized. However, there is a good chance that someone will find out about it before this happens. In such a scenario, you should be ready to field questions from customers, employees and others who have a vested interest in the continued existence of your company. Ideally, you’ll answer those questions in an honest, confident and discrete manner. Doing so can help to maintain confidence in the firm without jeopardizing your ability to obtain a favorable outcome in your case.
You may lose control of your company
Depending on how a settlement is structured, you may need to sell a majority stake in your firm to buy out your spouse. Alternatively, a settlement may stipulate that your spouse is to receive a significant ownership interest in the company, which could make you a minority shareholder.
What can you do to minimize the damage a divorce might do to your business?
Putting your business in a trust will likely protect it from being allocated in a divorce settlement. It may also be a good idea to create a buy/sell agreement that prohibits your spouse from acquiring any portion of your company. Finally, you can purchase an insurance policy that can fund the purchase of your spouse’s ownership stake in the company.
With proper planning, the end of your marriage won’t necessarily result in the end of your company. Even if your former partner is awarded a portion of the firm, it may still be possible to forge a working relationship that both parties can be content with.