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Can you protect your business during divorce without a contract?

On Behalf of | Jun 5, 2020 | Divorce

Owning a business in North Carolina may present unique challenges if you are going through a divorce. Protecting your assets and the organization you have worked hard to build requires you to make timely and strategic decisions.

You can take proactive measures to protect your business during divorce with, or without a contract.

The value of a contract

Contracts have substantial value when you own a company that could suffer damage at the outcome of a divorce. In a pre-nuptial or post-nuptial agreement, you have the option of making designations about the ownership of your organization in the event your relationship with your spouse ends. However, if you do not have a contract in place and a divorce is inevitable, there are still things you can do to minimize the impact your divorce has on your company and its security.

Organization and documentation

According to Forbes, when you do not have a contract in place, one of the most critical steps you can take is to document everything that happens within your company in regards to finances. Keep a record of your sources of capital and how you acquire funding. Keep track of the use of premarital or marital funds. This information may provide valuable support during a divorce.

Other things you can do to protect your business include establishing clear ownership and responsibilities and giving yourself a salary that is consistent with industry standards. Organize and keep control of all cash transactions. Perhaps the most important thing you can do is to keep a clear boundary between personal and business expenses.