It’s not uncommon for New Jersey couples to go into business together. The process of running a business with the person you love can be a very rewarding experience.
However, splitting that business in a divorce can be extremely difficult. Even with heightened stress and emotions, it’s important to protect your business during the process.
The first steps in splitting a business
If the couple has no interest in running the business together, they might choose to sell the business. Alternatively, one spouse will decide to sell their share of ownership.
In signing the paperwork, the spouse leaving the business will be giving up any ownership. The spouse who will be running the business is responsible for ensuring that there are no loose ends.
The staying spouse will want to ensure that the paperwork covers future profits and dividends, usually ensuring the partner leaving will have no access to these things. The paperwork should also state how benefits like health insurance and retirement accounts are handled.
Non-compete clauses in divorce
It’s not uncommon for businesses to have employees or owners who are leaving the company sign a non-compete contract. They also might have to sign a non-disclosure agreement to protect the business’s intellectual property.
It’s up to the leaving partner to ensure that they’re still able to find work after signing the non-compete contract. The goal is to protect the business without totally taking away the leaving partner’s ability to find work.
Tips for the leaving business partner
The leaving business partner is also responsible for reviewing all of the transfer agreements to make sure they are fair. The leaving partner should also consider additional measures to protect themselves from future liability.
The partner might consider having additional release paperwork signed that clearly states the leaving business partner has left the company and is not held liable for future or past profits or damages. They also might purchase insurance in the event of a future lawsuit.
It can be difficult to split the business, especially in the heat of a divorce. It’s important to take the time to consider all of your options to protect your interests.