You worked hard to get your small business off the ground, through early mornings and late nights. Once your dream becomes reality, it is only natural that you worry about what could happen to your business if you are facing a divorce.
One of the most common concerns that small business owners share in this situation is the fear that they will have to sell off their business and close their doors. Is this something business owners should worry about?
It is true that business assets are subject to division…
Your small business is likely marital property – at least, parts of it may be.
For example, if you started your business before you got married, the business itself may be separate property. However, any increase in its overall value throughout the marriage could be marital property. On the other hand, if you opened the business during the marriage, then it is considered marital property.
Under North Carolina law, you and your spouse will equitably distribute marital property. That could mean your spouse has a right to a portion of:
- Your income from your business
- The value of the business, or the value that increased during the marriage
This requirement will make it necessary to obtain an accurate valuation of your business assets.
…but that does not necessarily mean selling the business
Simply because your business may be subject to property division does not mean you have to close up shop. However, it will require you to plan strategically to protect your business during divorce. It will be particularly important to brace for the financial impact that a divorce – and property division – may have on your business.
As long as business owners prepare on financial, legal and commercial fronts, it is very possible to keep their business open and thriving even if their marriage ends. In these cases, it is often beneficial for business owners to consult legal professionals to protect their rights and secure their business assets.