As a business owner, you understand that your divorce places your small business at risk. You likely want to do everything possible to ensure your final order allows you to have continued operations for years to come. However, the property division process may mean your spouse has some claim to your business, its profits or its assets. It is in your interests to know exactly who owns your business and how you can protect it.
Ownership of a business is a crucial component in deciding what will happen to it during a divorce. You will find it beneficial to know how you can protect your business, what your rights are as the founder and owner, and how you can ensure you still own the business when the divorce is final. There is a lot at stake, and preparation is an important component of your success.
What you need to know
All marital property is subject to division during your divorce. This could include your business, depending on when you launched the business and other factors. Consider the following information about marital property and business ownership:
- Your business may be marital property if you and the other spouse co-owned and operated the business together.
- Your business may be marital property if you started your business after you were married.
- Your business may be separate property if you owned the business before marriage and operated solely after you married.
Even if your spouse did not help co-found your business or work for the business during the marriage, he or she could have a claim to a share of it. The business may qualify as marital property if the spouse contributed to its success. This may include financial contributions, but it could also include supporting you, such as by caring for the kids and home, while you worked for the business.
Fighting for your future
Divorce can change your finances in multiple ways, but you can still take steps to preserve your long-term business operations. Before you agree to terms on a property division agreement or make any important decisions regarding the future of your company, it may be helpful to learn as much as you can about property division in Colorado and how it may affect you.