If you are a business owner and you begin divorce proceedings, your business may be at risk. This is even true if you have a partnership. Your partner is not protected against your divorce unless you take the right steps to ensure that protection long before you ever begin your divorce in California. It is essential to understand this from the perspective of someone getting a divorce and the perspective of the other partner in the business.
Forbes explains that a partnership only protects a portion of the business. Your soon-to-be-ex cannot touch the other partner’s portion of the business, but he or she can get to yours. This could allow your spouse to make a claim on part of your ownership in the business, which could lead to having to sell your portion of the business, buying out your spouse or other issues that put the business at risk, including your partner’s portion.
The best way to protect the business is to put provisions in place when you establish it. You should reach an agreement with your partner on how to handle a divorce situation. You should include this in your business documents. Make sure that you also solidify confidentiality as well. If a spouse works for the business, pay him or her a fair salary so any claims to the business are minimized.
Finally, make sure that you keep the lines of communication open. Let your partner know what is happening and what may happen. You owe it to your partner to make sure the business is not affected by your divorce in a negative way. This information is for education and is not legal advice.