Kennedy Law Associates

Why some entrepreneurs may want a prenup

People in North Carolina who are considering starting their own businesses may also want to consider a prenuptial agreement. This can keep the company separate from the couple's joint property in case of a divorce. According to some attorneys, there is a rise among young entrepreneurs asking for a prenup even if they do not yet have a company in place.

Prenups have already been used in a number of prominent couples' divorces. For example, Sergey Brin, a Google co-founder, retained his shares in the company following his divorce. Oracle co-founder Larry Ellison has retained his shares in his company through multiple divorces. However, it is important to keep in mind that a prenuptial can be subject to challenges. The wife of Zynga's founder did so, but since court records regarding their divorce were sealed, it is unclear whether she was successful.

Even when founders and entrepreneurs do not specifically have a prenuptial agreement, they may be required to have something in place that protects the business from the spouse in case of divorce. For example, venture capital firms might require a way to keep their investments protected if a spouse receives a substantial number of shares in a divorce. A spousal consent form might prevent the spouse from having voting rights and limit the selling of shares.

If there is no prenup and one or both individuals own a business, the process of property division could become more complex. If they own the company together, one person may want to buy out the other. Another alternative might be for the couple to sell the company. The company will need to undergo a valuation process, and there could be pitfalls along the way. For example, the couple might need to decide who will keep running the company if it takes some time to sell it.

No Comments

Leave a comment
Comment Information
Contact Us

Tell Us Your Story

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

In Your Neighborhood

Are quality legal services available in your Charlotte neighborhood? Yes, our offices are located in Ballantyne, so you do not need to fight traffic driving uptown or deal with the inconvenience of paid parking decks. We are just minutes from the Ballantyne Corporate Park right off of I-485. An initial domestic consultation with Kennedy Law Associates is a positive step toward creating a roadmap to a better future.

14835 Ballantyne Village Way, Suite 225
Charlotte, NC 28277

Phone: 704-512-0619
Get Directions

Call