Prenups and partnerships: What business owners need to remember

Prenups and partnerships: What business owners need to remember

| May 17, 2021 | Business Formation |

Love and business aren’t particularly intertwined in your world, so why would you or your business partner need a prenuptial agreement before either of you get married?

Frankly, it would be foolish not to make prenups a part of your partnership agreement. Without them, a disastrous marriage could also be the death of your business.

Prenuptial agreements should be a requirement for all business partners

With a well-drafted prenuptial agreement, business partners can make sure that their ownership interest in a company remains separate from their marital property.

Otherwise, the new spouse could easily gain an interest on the income the business produces, the value the business builds over the course of the marriage and the company’s ownership rights.

If, for example, your business partner marries without a prenup and then ends up in a messy divorce, you may find that you’re suddenly sharing your business with their ex-spouse.

A good prenup can also make another difference for your business. It can shorten the divorce process and minimize conflicts that could distract your business partner and impede your business. It doesn’t take much trouble for a once-loyal customer to take their business elsewhere, for example.

Plus, when marital conflicts spill over into the business world, it can create stressful work environments and a sense of instability that causes even the best employees to flee.

When you’re starting a new business, you have to think ahead

Part of a business attorney’s job is to help their clients think about possible future scenarios and mitigate their risks. Working on your business partnership takes time. Working with an experienced advocate, however, is one step you can’t afford to skip.