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Postnuptial agreements for small business owners

| Jan 10, 2020 | Divorce |

Small business owners in Georgia may want to take special care to protect their companies from a divorce or dissolution. This is especially true for the founders of new startups who are looking for investments from venture capital companies. Many business advisers will recommend that business founders opt for a prenuptial agreement before getting married that specifically deals with how the business will be handled in the divorce. This does not have to mean that the other spouse walks away with nothing; it may provide for other types of compensation while keeping the company itself walled off from the property division process.

Many businesses have faced serious problems when a founder of a closely held company divorces. They may need to divide shares in the company, changing the environment at the firm, or even put the company on the market in order to split the proceeds from a sale. In other cases, company funds may be needed to buy out one spouse in the divorce, even if the other spouse was the only one active in running the business on a daily basis. As a result, many investors and venture capital firms want to see proper agreements on record before sinking funds into an exciting startup venture.

However, if the business owner is already married, they still have options to help them protect the company and secure the investments they need. A postnuptial agreement can be helpful to business owners, even those in happy marriages. Like a prenup, it can determine exactly how the company will be handled in the event of a divorce.

Business owners have to do a great deal to provide reassurance to investors and business partners, and a postnuptial agreement can be part of that process. A family law attorney may provide guidance on negotiating a fair postnup.

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