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Located in Quincy, Massachusetts, Levin and Levin, LLP was established in 1933 as a full-service law firm committed to providing clients throughout the South Shore with the highest level of legal representation available.

3 tips for divorce-proofing your company

| Oct 21, 2017 | Blog

When you start a business, you have hopes of it succeeding. The same goes for a marriage. Unfortunately, some companies and marital unions are not forever. But just because one ends does not mean the other one does. If your relationship with your spouse goes south, you should be able to keep your business intact.

But if you are not prepared, your business could be toast along with your marriage. Read below for the most helpful tips to protect your business from a divorce.

1. Sign a prenuptial or postnuptial agreement

According to The Business Journals, signing a marital agreement is one of the most effective ways to ensure a potential divorce does not affect your company. If you are not married yet, you can pursue a prenuptial agreement with your soon-to-be spouse to clearly state your business assets are your own. But if the marriage already happened, you can still put together a postnuptial agreement. 

2. Keep business finances separate

Beware the temptation of mixing business and personal assets. Do not borrow from your house account to purchase a company vehicle or write off a new personal car as a business expense. Keep your professional and personal assets clearly separate by maintaining good records. 

3. Pay yourself an adequate salary

You may be tempted to underpay yourself in order to build the business. However, limiting the cash flow from your business can come back to bite you if you do ever get divorced. Your spouse may argue that he or she is entitled to more of your business assets. Play it straight and pay yourself a reasonable market salary. 

Having a successful business and marriage is hard work, and sometimes it does not always end well. But if you keep these tips in mind, you can prevent a marriage dissolution from taking a toll on your company. Make sure your business is divorce-proof.