McCoy Fatula, APCMcCoy
Located in Roseville, CA

Prenup important for business owners in divorce cases

Many California residents and others around the country are going into business for themselves. Whether developing a product or offering a service, more and more people are embarking on start-up business ventures. Married or engaged couples often work with each other as the new company gets started. While a common practice, this interaction could lead to complications should the couple get a divorce.

Marriage experts suggest that engaged couples sign a prenuptial agreement, particularly if there is a business involved. If the business is designated as separate property, it is protected, even if a spouse contributes to its operations. On the other hand, married business owners should consider a post-nuptial agreement. The same provisions of protection can be included; however, the document is signed after marriage.

It is also important to structure the business properly. Include a provision that determines how company issues will be handled should the marriage end. Some possible issues that may be addressed in a provision might include spouse voting rights, selling to third parties or limitations on acquiring ownership.

Experts also suggest that, if a spouse is not already involved in a business, keep it that way. There is nothing wrong with the business being a personal interest of one spouse. Business owners should keep their company finances separate from their marital finances. If joint funds are used to support the business, the spouse could claim a portion in a divorce.

The divorce process can be complex. If one or both spouses own businesses, the complexity is even greater. A California divorce attorney can help clients understand the process and develop a plan to protect one's interests in the proceedings.

Source:, "Why a Prenup May Be A Woman Entrepreneur's New Best Friend", Jenny Odegard, Aug. 2, 2017

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