Married to the job - Pre-nuptial agreements to protect your business

When we hear the term ‘pre-nuptial agreement’ we usually associate it with the rich and famous.

However, it has become increasingly important for business owners to protect their company and its assets from the financial effects that could result from a divorce, even if it is not necessarily their own. If you own shares in a company and one of your fellow shareholders is going through a divorce, it may be the case that they are forced to sell or transfer, part or all of their shares.

This then puts you in the position where you either need to find the money to purchase the shares, or risk being forced into business with an ex-spouse. Alternatively, it may be the case that instead of selling shares, your fellow shareholder needs to draw more dividends from the company to contribute towards the divorce settlement, which could adversely affect cash flow.

These types of situations are very real, and it is important to consider putting these kind of protections in place. In a similar manner, a ‘post-nup’ can also be set up at any point after a marriage and will offer the same protection as a ‘pre-nup’.