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Steps to take when divorcing as a North Carolina business owner

| May 24, 2021 | Divorce |

When you own a business in North Carolina, the fate of your enterprise becomes a primary concern if your marriage ends. Because the state requires equitable division of marital property, your spouse could receive a portion of your business even if you started the company before you met.

Taking these steps can help protect the value of your business in a North Carolina divorce.

Record business contributions

If your spouse contributes to the operation of your company in any way, carefully and comprehensively document those contributions. These records (or the lack thereof) will help establish a fair arrangement when you negotiate the division of your business.

Take a reasonable salary

While it may seem counterintuitive to pay yourself for the work you do as a business owner, doing so helps protect the company in a divorce. If you do not take a salary, your spouse could content that he or she deserves a larger portion of marital property because you did not contribute to household expenses.

Establish a written agreement

If you do not already have business bylaws or an operating agreement in place, you can use this type of legal contract to establish the share of the company each partner’s spouse would receive in a divorce. This can be a flat fee, ongoing shares or a percentage of the value. You can also make a postnuptial agreement that designates your company as separate property.

When you and your spouse operate the business together, you may decide to sell and split the proceeds or continue to work together as partners.

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