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Owning a Business with the Ex-Wife

Dear Carolyn, 

We have a small family business. I do all the work with customers; my ex-wife does the bookkeeping. We both own the company as shareholders. We now are now separated. What protections do I need to put in place? She writes checks that are not for business expenses out of the business account.

– Concerned

 

Dear Concerned,

It is rare for a couple to be able to continue in a small business together after divorce. There is just too much friction. I will give you some general tips, but go over your situation with a family lawyer of your choice. First, take care of your customers, and keep them out of the divorce drama as much as possible. Do not use your customers as confidants. Second, consider hiring an independent bookkeeper. I strongly recommend that you review invoices and sign the checks yourself. You also may need to change signature cards at the bank. Third, if your ex needs money from the company, consider a draw for her for her personal use. You may want to establish a draw for yourself as well. Fourth, you need to document exactly where the business is that the date of separation. You need an interim financial statement at the date of separation. For example, you need to document the balances of loans, financial account balances, receivables balances, and inventories at the date of separation. The date of separation is the date of valuation for equitable distribution, which is the property division statute. Finally, if reason does not prevail, a motion for a restraining order might help maintain a feasible situation for you and your customers.

 

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This blog is an excerpt from Ask Carolyn 2, available on kindle.  

Send your questions on family law and divorce matters to “Ask Carolyn…” at askcarolyn@rhinotimes.com, or P.O. Box 9023, Greensboro, NC  27427.  Please do not put identifying information in your questions. 

Note that the answers in “Ask Carolyn” are intended to provide general legal information, and the answers are not specific legal advice for your situation.  The column also uses hypothetical questions.  A subtle fact in your unique case may determine the legal advice you need in your unique case.  Also, please note that you are not creating an attorney-client relationship with Carolyn J. Woodruff by writing or having your question answered by “Ask Carolyn.”