Although you may not think divorce will happen to you, it’s worth having some sense of practicality, in particular in relation to your retail business. This can be especially the case if your business is co-owned, or if it may be a family business, for example. We explore four of the most significant ways in which your retail business can be impacted through divorce.
Impact on The Daily Running of Your Retail Company
As a retail business, you are used to fast time scales and responding to unexpected demands from customers and suppliers. When you are going through a divorce, those demands can be trumped by new ones from your divorce. For example, preparing to go to court, speaking regularly with your family lawyers and discussing matters with your spouse. You may also need to get your business valued, provide documentation to the courts and if your business is family run, you may have to have difficult conversations with other family members. All of these can take over the day-to-day management you are used to normally.
The Impact on Your Retail Staff
Your retail business relies on knowledgeable staff who need to stay focussed. Going through a divorce may require some of their time though. For example, you may need your admin staff to collate information and documentation to provide to your solicitors, or you may be some of your employees will be interviewed by a business appraiser to get their view on how the business is managed. All of this can take their time away from the day-to-day running of the company.
The Dissolution of Your Business
Dissolving your business as a result of your divorce is the least common of all outcomes, thankfully. However, in a few cases, it can be beneficial if a former couple has an equal share in the company. Sometimes, it could be that in order to pay out your ex-spouse you will need to make a large cash payment. If you do not have the funds available, you may need to sell the business as a result.
Impact on Other Business Partners
If you are in business with others, then naturally they will be impacted to some extent too. It you need to pay out your former spouse in some way, this could leave your business partner having to deal with your ex as someone new with a stake in the business. This could impact the overall value of the business too.
Discuss the different eventualities with your family lawyer so you can think ahead on how your divorce could impact your partner and what you can do to reduce the risks. Conversely, your ex-spouse could be crucial to the business but decide to withdraw as a result of a divorce, leaving behind more work for other people and/or partners, and negatively affecting the value of your company.
How Can You Mitigate The Divorce Risks to my Retail Business?
Luckily, despite the potential outcomes, there are things you can do to counter the issues. You might want to arrange a pre-nuptial agreement if you are not yet married, and if you are, you can arrange a post-nuptial agreement instead. These documents allow you to set out how the business value will be distributed in the event of a divorce.
Other ways you can protect your retail company are much like you would protect any other type of business. For example, from now on, you may want to keep detailed records of all business capital, and whether or not these could be considered marital assets i.e. were they acquired before or after you were married?