If you are engaged to be married and own a small business or sole proprietorship, now might be the time to speak to a family lawyer in Brooklyn, New York. When individuals wait until they are about to get divorced to protect their small business, it is often already too late. Once you get married, if you own a closely-held business or sole proprietorship, it can sometimes be difficult to distinguish between business assets and marital assets. Should you ever get divorced, your partner may be able to claim ownership of half or part of your business. New business owners may not feel like they have assets to protect, but if you’ve made significant investment of time or money into your business, a prenuptial agreement can make clear your investment and make clear expectations about who owns the business should you and your partner ever divorce. The Elliot Green Law Offices are family lawyers in Brooklyn, New York who can assist you with drafting a prenuptial agreement that can protect your interests.
Understanding How Marriage Can Impact Your Small Business
Let’s say you own a business and when you get married, the business carries significant debt. You might not think there is anything to protect, so you may not create a prenuptial agreement. But then, let’s say, three years later, your business is thriving, is out of debt, and is turning a nice profit. Unfortunately, your marriage isn’t doing too well, and you plan to get divorced. What does this mean for this particular business described in this scenario? In most cases, the added value the business attained during the marriage could be considered marital property. This means that even though you may have gone into debt to start the business, your partner may still be entitled to receive half the profits or half the value of the business.
One of the ways that you can protect yourself from this situation is to have a clear prenuptial agreement in place before you get married. You may want to do this whether your business is in debt, is making very little profit, or is already quite profitable. If you are working hard to grow your business, without a prenuptial agreement in place, your future partner could be entitled to receive the value of your businesses’ growth. Divorce battles involving businesses’ can get messy. Individuals may need to hire experts to value the business. If you and your partner own real estate or other assets, the business owner may find themselves in the situation where they need to offer marital assets in exchange for keeping sole ownership of the business.
The best way to prevent misunderstanding or a big battle later is to draft a prenuptial agreement now. Elliot Green Law Offices are family lawyers in Brooklyn, New York who can review your situation, help you understand your options, and assist you with a prenuptial agreement that can work for you. Contact us today to learn more.
What Options Do Business Owners Have To Protect Their Business When Getting Married?
This is not meant to replace the advice of a sound accountant or family lawyer, but business owners may have several options available to them when it comes to protecting their business through a prenuptial agreement. For example, the prenuptial agreement could clearly note that the business is a separate property and not marital property. Individuals who choose this option may want to hire an accountant and lawyer to help them take steps to incorporate the business as a separate entity and pay themselves a fair salary from the business profits. The salary would then become marital property, while business assets would remain within the company. Another option could be to make clear what percentage of the business your future partner would be entitled to receive should you ever get divorced and also make clear how that percentage will be handled—will your future partner receive profits like a shareholder? Will your future partner be able to force a sale? Or will your future partner only receive a share if you sell the business? These are all important questions to consider when protecting your business before marriage.
If you are engaged to be married, congrats! However, if you own a business, have just launched a startup, or are just starting to work on a project that you hope will someday be profitable, you may need to take steps to protect your business and your interests. The Elliot Green Law Offices are family lawyers in Brooklyn, New York who may be able to assist you with drafting a prenuptial agreement that can protect your interests. Each partner signing a prenuptial agreement should have his or her own lawyer. If you need assistance, contact the Elliot Green Law Offices, family lawyers, in Brooklyn, New York today to learn more.