Bluegrass Business Law

September 3, 2008

Divorce Could Impact Your Business

Even if you have your business in an LLC, PSC, S-Corp or other vehicle, that business can still be subject to the courts if you, as an owner, go through a divorce. This post at Lexington Family Law blog regarding a recent family law decision outlines one scenario that could entangle your business in a dissolution of marriage action.

The very best thing to do for your business, whether your are a sole owner or have multiple owners, is to go beyond simply filing Articles of Incorporation. Be sure that you have bylaws and that you operate by those bylaws. Furthermore, examine your bylaws and see if there are any provisions regarding the eventuality of an owner going through a divorce and whether there are any protections for the business. In addition, review your status and practices to best protect from a court piercing the corporate veil and viewing your business as a mere alter ego of you. This includes the bylaws, but expands to how money is handled, record keeping, sufficient capital in the business, etc.

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