Business Partner Is Getting a Divorce: How To Protect Assets

Divorce may affect not only the former spouses but harm the people around them. More when considering a divorce with a business involved, it is not only divorcees to get concerned but their business partners as well.

If you predict your business partner to finalize marriage soon, it is better for you to get prepared to protect your assets and your company from any negative impact. It’s better to stay safe than sorry in such a tricky situation, so review the following points to get ready in time.

What to Be Ready For

Even it is not you who file for divorce online, but for example, your business partner, beware of the possible influence of their private issues on your business and assets. Check out the probable ways your business may interact with your partner’s divorce so that you can come up with the best solutions and avoid any harm to your interests and company in general.

Another Spouse Involved

If your partner’s share in your company business is considered as marital property, it will be divided between the spouses according to the local legislature, either equally or equitably. This means that a person, who has probably no relation to your business may become a stakeholder and gain a voting influence on the company’s deals. It may lead to a serious conflict of interests and have negative outcomes for your business in general.

The best way out is to pay off the company share’s value assigned to another spouse to prevent their involvement in the business. If your partner cannot afford it themself, it is in your company’s interest to cover the expenses.

Assets Evaluation

Consider that when divorce and business assets are involved in one case, the process you won’t avoid is assets evaluation. This means that a deep investigation of your business is to be conducted by third parties to determine the exact divorcee’s share. So, if you predict your partner to get divorced soon, review your taxes reports and other financial issues before anyone can get access to them so that you don’t have any troubles with the law or your partners.

Partner’s Emotional Instability

Divorce may have a serious impact on your partner and your business, therefore. You have to be ready that their involvement in the divorce process will decrease your partner’s productivity. Additionally, the stress and constant tension the marriage termination may bring won’t make your partner a valuable and committed worker either. There may be also a threat of your partner sabotaging your business so that their financial status appears poorer than it is in reality.

How to Protect the Company

Considering all the threats of your partner’s divorce when you own a business together, it is necessary to create a safety plan to diminish the negative impact on your business and assets as much as possible. Follow these simple steps, and you will increase your chances to save your company.

Discuss the Issue in Advance

Introduce appropriate company policy to protect your business from divorce battles. Namely, require all your business partners to create a pre-nuptial or post-nuptial agreement where they will specify their shares as personal property. So when the divorce comes into question, another spouse will have no right to own any of your business’s interests.

It is also wise the principle of fairness and openness in your company. So that when any of your partners plan a divorce, they will announce it in advance so that you can protect your company from any negative impact.

Assign the Substitute

When divorce and business ownership overwhelm a person all at once, it is evident that they won’t be able to commit qualitatively to both. So, it is wise to give a soon-to-be divorcee some space and time to deal with personal issues so that they can devote their efforts wholly to the business afterward. That is why it is necessary to assign a substitute specialist for a person going through a divorce not to have any gaps in the business operations. Or you can get your partner an assistant to decrease their workload and leave some time for personal issues instead.

Change the Type of Shares

If your partner has a preferred type of share and you spot their divorce on the horizon, there is another smart move for you to make. Change the type from preferred to common so that when their partner gets the shares, they will be transferred without voting rights. This means a non-involved person won’t have much impact on your company’s business in the outcomes.

Create Confidentiality Agreement

A confidentiality agreement is another ’must’ when dealing with divorce with a business involved. By making your business partner and all the divorce process participants sign a confidentiality agreement, you will protect all the data referring to your company you need to expose. As a result, no one will use your company’s information for their purposes and any malicious actions.


Divorce may have a negative impact on your business, even if it is not you to terminate a marriage. This makes it necessary to apply serious safety measures together with your business partners so that no one’s personal issues can harm your company. Study the lawful ways of protection, care about business security in advance and provide all necessary help to your business partner in divorce to defend your company well.

Article by Born Realist