Advice please. Self employment

[avo70]

Ok. I am currently in a partnership and have been for 9 years, however this is with my wife and we are separated. I an going to be working self employed in the building trade now on my own rather than the shop which the partnership is run. Do I set up another business in my name? I don't wish for the two to become one business, as we shall be divorced and she will retain the shop?

[turboguy]

Yes, you would need to set up a new business. It can be a sole proprietorship or LLC or any format you wish but you would need to set it up to make it separate from the partnership.

[Harold Mansfield]

Yep, I would dissolve the partnership business, split any assets and liabilities, and open a completely new business AFTER the divorce is final (or at least the filing is official) so that she doesn't have claim to anything you create while you're still legally married.

[Freelancier]

If your soon-to-be-ex is litigious, then I recommend you get a business attorney to help you unravel the business. Unless you want to just walk away, but even then you'll need to walk away with no liabilities and limited future responsibility for past actions. And that says "lawyer up!"

[crispin cliff]

You should definitely start separate business after your divorce because it is a big risk for you if you want to run business with your wife after divorce. If we work in a partnership our partner always think about getting profit for business but according to me after your divorce your wife will be your enemy more than your business partner. So it can become a cause of big loss if you don't start your business separate.

[Krystsina]

Of course, you should set up your own business in your name. What is another option - to do it in the name of your wife? Why do you need to do it? If you are going to be divorced soon, you should definitely make your new business only in your own name. Moreover, it would be better if you open up your own business after the divorce to make sure you share your common business between you two, without creating another potential problem for yourself.

[PZagotti@ZnBcpa.com]

I agree with the other posts, you should setup a separate entity but be careful about timing like Harold recommended.
I love asking this question because it amazes me how many people own an interest in a business but don't have an operating agreement but here it goes....
What does your partnership operating agreement say about dissolving the business or buying each other out?

One other thing to be aware of, it takes two to form a partnership and when one of the two partners leaves, generally there is a technical dissolution. This means that the company has technically been dissolved and a tax return will need to be filed for the year to dissolution date 3.5 months after the dissolution. Another word the partnership may have to file two different tax returns during the year. There is a large find for missing this tax return due date.

Thanks

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[Sarah K]

Set up a new business, it's the safer choice. Even if you're on good terms with your ex-wife, you could run into trouble down the road if things get rocky. Even if things don't get rocky, you could run into issues. If your business becomes really successful, you need to make sure you're firmly in control of it too.