Dissolving a business partnership itself is a complex exercise, which can turn messy before you know it.
On the personal front, a divorce is never easy to deal with, even under the most amicable of circumstances. When having to deal with both simultaneously, clearly it is time for extreme care and foresight.
Fortunately, good attorneys with experience in dealing with divorcing business partner couples exist. They can assist you through the legal process.
Consider the Future of Your Business Carefully
After filing the divorce petition, both you and your spouse will have to consider each other’s stress levels and give each other sufficient time and freedom to overcome the mutual tension.
You may think you are losing everything but there is always more to lose. Control your emotions.
Only then can both of you be capable of making sound decisions for your business and life.
Vital decisions about the business that you will need to address are:
- Should you sell the business?
- Should either partner run the businesses in the future?
- Should you both remain business partners despite the divorce?
For the last option to succeed, both you and your partner should be able to separate personal differences from professional working and decision-making. This is often easier said than done.
Useful Tips to Preserve Your Business Value through a Divorce
Some ways in which divorcing couples can ensure that their business retains its intrinsic value include:
1 – Keep your employees, customers, and vendors out of your divorce issues. They are in no position to help you with those types of issues and will most likely just make things worse. By involving them, you will only add to their fears of the business’s future stability.
2 – Refrain from purposefully avoiding each other or getting into personal squabbles with your spouse within earshot of your clients, employees, or suppliers. Episodes like that might make them fear that just like the marriage the business is rotting as well.
3 – Defaming your partner to your staff, clients, or professional contacts during any business interaction can be counter-productive. So avoid doing that. It is unprofessional. When the turmoil ends and sanity returns, you will be able to appreciate each other’s strengths rather than focusing on weaknesses.
4 – Avoid making colleagues a go-between in your interactions with your partner. As a business promoter, you have to act mature. Otherwise, you could lose credibility with co-workers and staff. That would be bad for the future of your enterprise.
5 – Irrespective of how furious you are, never damage any office property or put your company’s image at risk in any way. At the end of your divorce, your business assets and their worth could be critical. You and your partner may have to earn a livelihood from the business or seek employment elsewhere.
6 – If your partner was cheating on you with an employee, don’t make matters worse by acting in haste at the office. Avoid name-calling. The involved employee may seek legal recourse. They may be within legal bounds to slap a sexual harassment charge against you or the partner they were involved with. Perhaps even slander. Allegations of wrongful termination could also be made if the employee was compelled to leave due to poor treatment at work.
7 – Keep your stress and anger aside and make sure you are at work every day. Maintain a pleasant persona and stay amicable in all your professional interactions. Advise your partner to do likewise. Set your personal differences aside and act cordial to each other as well.
8 – Irrespective of the terms of your business, your actions as a Managing Member or President of a partnership business could have a bearing on your divorce case in court. Keep personal discussions related to your divorce and its effect on your life out of your workplace. Here, you need to stick to professional topics and matters for discussions.
9 – Bring in an impartial intermediary to act as a business coach who can explain ways in which you can communicate to each other and execute day-to-day business resolutions during the course of the divorce. Otherwise, chances are that due to your personal apprehensions about the outcome of the divorce, your business’s everyday decision making will become paralyzed or undermined.
10 – Work hard to ensure that your business thrives. Avoid thinking that if you make more money, you will ultimately end up losing more in a divorce. That is a defeatist attitude and not something anyone wants to practice. Exhibiting poor business results to undervalue your business is a bad idea.
11 – Safeguard your capital while striving to increase the cash flow from the business. You will both learn many new things that will be valuable in the future, especially if you decide to buy your partner’s share in the enterprise after the divorce.
12 – Maintain all business records diligently and truthfully. Cash outflows that do not add up in the books can be problematic in the future. Don’t bill your personal affairs to the company or its credit cards. Keep your personal expenses separate.
13 – Inform your chief bookkeeper, accountant, and lawyer about the divorce. Make them aware that you will need access to business data. If instead, you demand the records all of a sudden, they might get confused and presume that you are selling the business or thinking of letting them go. While informing them of this, ask them to keep this matter to themselves.
14 – Contemplate the situation before informing creditors, key suppliers, large customers, and senior staff about the divorce. Keeping them in the dark as long as possible or communicating to them all at the same time may be more suitable. You will have to struggle with unnecessary problems if any of these persons/factions become insecure and passes the fear to others as well.
15 – Appoint an arbitrator if your business issues are tangled up. Get the court to restrict access to your case. Stakeholders from your business don’t need to know your personal matters.
If you follow a negative approach to determine the fate of your business as divorcing partners, it will be detrimental to everyone’s interests. But not your competitors!
Approaching the matter with flexibility and reason will ensure both of you walk away with a fair deal.
Even while dealing with disgruntled spouses who are also business partners, a focused and experienced attorney will be able to suggest a suitable strategy in the best interests of both parties.