Many of our clients have spent years building their small business, only to realize that their divorce could compromise its continued existence. At Lawrence Law Office, we are committed to helping entrepreneurs maintain the value of their business throughout a divorce, and we offer 5 easy steps that each business owner should take. Schedule a meeting with one of our Ohio divorce lawyers if you would like to discuss this topic further.
Limit Your Spouse’s Involvement
Unless your spouse is a co-owner, you should remove him or her from the daily running of the business. As Divorce Mag recommends, this might mean firing your spouse if he or she won’t voluntarily sever ties with it.
Failure to remove your spouse could be disastrous:
- Your spouse could poison staff against you by coming in and badmouthing you during the divorce.
- Your spouse could use social media to post embarrassing information about your company, which harms its reputation in the community.
- Your spouse could take sensitive business information and give it to a competitor or disclose it publicly, including client lists or trade secrets.
- If your spouse is an employee, he or she could sign contracts that bind the company. These contracts could be economically disastrous.
It is ideal to remove your spouse from the business so that you can protect your company’s reputation and intellectual property.
Insist on Non-Disclosure Agreements (NDAs)
NDAs are agreements not to reveal private and potentially valuable or sensitive information about the business. Not only should your spouse sign one, but his or her legal team should sign NDAs, also—lawyers, accountants, business appraisers, etc. This way, your information will not leak out during the divorce.
If someone violates an NDA, they can be sued and forced to pay compensation for the harm they have caused. The use of NDAs is pretty common when sensitive information is involved, and it provides some measure of protection. They certainly create a disincentive for your spouse to take any action that could harm your business.
Avoid Court
Divorce court is public. This means the media and other interested parties can gain access to almost all information that is filed as part of the divorce proceeding. If you are disputing whether a business is marital property, then financial records, client lists, and profit-and-loss statements might be filed with the court. All are vulnerable to prying eyes.
You can avoid the glare of publicity by resolving your disputes outside of court. At our firm, we have experience mediating and negotiating divorces. These are voluntary procedures that sometimes yield amicable resolutions to disputes. We can also go to arbitration, which is like court but private.
If, despite your best efforts, you cannot avoid litigation, then talk with your lawyer about getting certain records sealed. Sealed records are withheld from the public, though they are available for the court and both sides to use in the divorce.
Delay Big Business Moves
While a divorce is pending, it is prudent to avoid making big business decisions. For example, you probably shouldn’t merge with a competitor during this time. It will be hard to focus 100% on the business details, which could harm you. Also, some or all of the business could be marital. Increasing the value of your business during divorce is simply a way to put more money in your spouse’s pocket.
Wait until your divorce is over or your lawyer gives you the green light. There is no reason to make your company more valuable during this time, which only enriches your spouse.
Hire an Attorney So You Can Focus On Your Business
Divorce can be time-consuming and emotionally draining. Any time spent thinking about your divorce is the time taken away from your clients and employees. Your business will probably suffer due to your split focus.
Hiring the right attorney has many advantages, but a key one is that your lawyer can serve as a buffer between you and your spouse. At our firm, we handle all communications with opposing counsel and only involve our clients when we need their input. Often, we can handle small disputes without involving our clients or we can solve them in efficient ways. The more time you can focus on work, the better.
If you are a business owner considering divorce, please contact Lawrence Law Office today. We will analyze the best steps to take to preserve your company’s value and reputation. The sooner we can get started, the more we can accomplish. Contact one of our lawyers to schedule your initial consultation.