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My husband & I are starting a Co. The corp. will be in my name. What tips can you give me to protect myself if we divorce?

Asked over 2 years ago - Los Angeles, CA

My husband has an extensive business background however I do not. We are opening our own company and I would like some advice on how to protect myself in the event that we divorce one day. The corporation will be put in my name, but I as I have very little knoweledge in this area, I was hoping to get some advice on things I can do now to protect me later. Thank you

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Attorney answers (2)

Dana Howard Shultz

Reputation Level 15

Answered over 2 years ago. Business Attorney in Oakland, CA.

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It's not clear what you mean by "in your name." Will you be the sole shareholder? If so, you should have the corporation set up with one director. As shareholder you would elect yourself as the sole director. Then, as the sole director (board member), you would appoint yourself to all officer positions (president, secretary, CFO) and would pass resolutions stating that you are the only individual who can sign contracts for the company (as its president) , and you are the only person who can sign checks (as CFO). That should tie things up under your control pretty well.

I'm concerned that, here at the beginning, your thoughts are about divorce. If your relationship is that tenuous, are you sure that you want to proceed with this venture? Do you expect that your husband will go along with putting all control in your hands? Under these circumstances, you should seriously consider retaining an attorney to protect your interests.

Be especially careful if your husband proposes that either shares or board control be split among you 50-50. You might find the information at the link below helpful in this regard.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

The 50-50 Deadlock

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Pamela Koslyn

Reputation Level 20

Answered over 2 years ago. Business Attorney in Los Angeles, CA.

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See a corporate lawyer to help get you up to speed on how corporations work. Corporations aren't put in someone's name, they're comprised of shareholders who own them and have shares issued to reflect that, directors who direct them, and officers who run them. You may or may not be planning to share ownership and control with your much more sophisticated husband or not, How you structure this corporation and run it and provide for future disputes will determine how you can protect yourself down the line.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

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