Getting married can inspire lots of hope. With that in mind, this hope leads many people to start and manage a business in New York with their respective spouses. Unfortunately, divorce can also lead to issues related to dividing ownership of the company you two previously owned together.
Document the details of your agreement
If a couple going through divorce must divide a business, they’ll need to create a settlement agreement. This agreement details how someone transfers their original ownership of a company in a divorce. With that said, a settlement agreement often covers a lot of topics. By creating clear terms, you can make the terms of this document easier for everyone to understand.
Protection from future litigation
An unfortunate but sometimes unavoidable aspect of owning a business involves dealing with court cases. Sometimes, these cases name people who no longer own a company in a lawsuit. To avoid this situation, this person would need to establish indemnity. By establishing indemnity, a company would need to pay a former business leader’s liability and trial-related costs.
Preventing competitive threats
As two business leaders who are also married spend lots of time working together, they often transfer a lot of company-related information to each other. This situation isn’t a big deal when their marriage is doing well. However, you might now wonder if your ex-spouse will use your company’s secrets to form their own business. Fortunately, companies can have former employees sign non-compete agreements to protect business secrets.
As you can see, dividing ownership of a business can complicate the divorce process. Fortunately, taking care of any concerns related to dividing a business can help you and your former spouse avoid a lot of stress.