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.