While the rate of divorce in the UK may be falling incrementally year-on-year, a surprising number of marriages continue to end in acrimony.
In fact, 42% of marriages now end in divorce, with financial pressures and the stresses of modern life continuing to place pressure on couples who choose to tie the knot.
Divorce can be distressing at the best of times, but it may be particularly stressful for entrepreneurs who own their own tech venture. With this in mind, here are some steps that can help you to protect your venture in the event of an impending divorce:
1. Do Not Involve your Spouse in your Business
While this may sound harsh, it is a practical and sensible step that can protect your commercial interests from the perils of divorce.
Of course, there’s always a temptation to involve your spouse in a business venture, as this creates a deeper union between two people and also offers a number of potential tax advantages (so long as the firm is question is not registered as a sole proprietorship).
By avoiding this, however, you can negate the risk of your partner issuing a claim against your business during the divorce, as they’ll have no direct stake in the venture and will have made no contribution to its success or failure.
2. Share Ownership with Outsiders
Many tech ventures emerge as the result of partnerships, acquisitions and mergers, creating shared ownership among a number of stakeholders.
This can actually be of benefit during a divorce, so long as one of the shareholders in question is not your spouse. The reason for this is that businesses that are owned solely by someone who is getting divorced will be treated like any marital asset, raising the prospect of it being, divided, shared or used to pay wider family claims.
If the business is jointly-owned by shareholders who exist outside of the marriage, however, the court is less likely to consider this asset as part of a divorce claim.
3. Separate your Personal and Commercial Wealth
When you seek out advice from a reputable legal firm like Withers Worldwide, you’ll also be advised to create a clear distinction between your private and business assets.
This means opening separate bank accounts for your personal wealth and business earnings, so that this information can be presented to the court. You should also avoid borrowing against the family home when funding your venture, as this means that your spouse can potentially make a claim against the business.
These small but significant steps can make a big difference, while helping to protect the future of your tech business and the equity that exists within this company.