In this file photo taken Aug. 8, 2008, wedding rings lay on a tray during a wedding ceremony in Heidelberg, Germany.Daniel Roland
A business "prenup" is an agreement between partners or shareholders in a company that anticipates important changes or difficulties that can occur, even years into the future, in order to avoid negative impacts on the company and between the partners.
Considerations include:
A partner wants to leave
Illness, retirement, a loss of interest or a breakdown of the partner relationship can lead to an unplanned exit.
Retirement
One partner might decide to retire decades before another, triggering a crisis.
Knowing these wishes early on and having them spelled out in an agreement can avoid later conflict.
Transference of shares or control to others
One partner might want their son or daughter involved, and other partners object.
Selling control to an outsider
Having an exit strategy in writing can anticipate bringing in outsiders, and what steps need to be taken in order to make this acceptable to remaining partners.
Personal bankruptcy
Personal financial difficulties can create a legal quagmire for the bankrupt's partners.
Divorce
Stock owned by one spouse may be considered marital property.
Death or long-term illness
A prenuptial can set up a plan of action if one partner is unable to continue.
Special to The Globe and Mail