When injected into a marriage, business ownership by one spouse can create premarital and postmarital issues. Customers, employees and suppliers continue to rely on the business to operate mechanically, without concern for the personal problems of ownership. Before the tidal wave of financial assessments and disclosures, document requests and other legal requirements crashes onto the floor, a married business owner or co-owner should develop strategies to minimize water damage.
What skills and strategies can help keep the business functioning?
Legal disruptions concerning divorce can only compound the difficult fluctuating economic markets. Efficiency within the day-to-day operations of the organization ranks most important. A prenuptial or postnuptial agreement affords the best protection against disruption by resolving distribution of the business assets to the nonowner spouse, especially one who worked for or contributed to its upkeep.
In the absence of an agreement, steps that reduce disruption include:
- Maintaining detailed records
- Separating business and personal expenses
- Assessing wages (including for the nonowner spouse)
- Refraining from using cash distributions on unnecessary expenses.
Where does California rank with regard to spouse-owned businesses?
Statistics that document spouse-owned and family-owned businesses reveal this demographic as prominent in California. The metropolis of Los Angeles-Long Beach-Anaheim, however, ranked fourth highest nationwide in the category, as well as for family-owned businesses. Three of the top ten metros with the highest percentage of spouse-owned businesses lie within California.
A successful financial partnership comprises one block of a solid marital relationship. Business ownership among either one or both spouses require a greater degree of communication to prevent breakdown of either the business or the marriage. An attorney with an understanding of both can guide you.