According to the U.S. Small Business Administration, there are over 34 million small businesses across the country. The people who own these businesses began with an idea, and fueled by their passion, they devoted their precious time and money to build their enterprise.
As one of these business owners, you likely feel that your business is a part of you. With all of this on the line, it is understandable to be anxious when facing a divorce. Does your spouse have a claim to this business you built?
3 questions to answer
To determine whether your business is yours alone or subject to division, you will have to carefully evaluate the details of your enterprise. It can help to start by answering the following questions:
- When did you start your business? If your business began before your marriage did, that is a good indicator that your business could be separate property. However, it is not the only indicator that determines this.
- Did you use marital funds for the business? If so, this could complicate matters when it comes to property division in North Carolina. In some cases, as discussed in a previous blog post, combining marital assets with business assets could be commingling.
- Does your spouse have any ownership interest? They may have helped you financially, become a shareholder or even worked at your business for a time. If so, then business assets could be marital property.
Answering these questions will help you determine the most important answer: whether your business is separate property and remains yours, or if you will have to divide its assets in divorce. Of course, there are many more factors you must consider. Your business is a complex asset, which can make the process of addressing it in a divorce complicated.
The dream you achieved when you started your business will always be yours. It is also critical to note that owners can establish strategies to protect their businesses and negotiate with their spouses to preserve the business – and even its future.