If you’re a small business owner, you’ve likely poured years of hard work, personal savings, and late nights into building something meaningful. Whether you’re running a freelance business, own a growing Shopify store, or co-founded a startup, your business isn’t just a job—it’s a major financial asset and part of your long-term legacy.
And yet, many entrepreneurs overlook a key risk to that business: what happens if your relationship ends?
This is where prenups, postnups, and cohabitation agreements come in. These legal tools help small business owners protect their ventures, maintain control, and avoid costly legal disputes. They also support healthier relationships by clarifying financial expectations upfront.
Here’s why every business owner in a serious relationship should consider making a relationship agreement part of their financial plan.
1. You Could Lose Part of Your Business in a Breakup
One of the biggest risks small business owners face in a relationship is the unintended division of business assets if things go south.
In many Canadian provinces, your business could be considered “family property.”
That means your partner—spouse or common-law—could be legally entitled to part of your business if you separate, even if they never worked in it or contributed financially.
In British Columbia, for example, family property includes any increase in value of a business during the relationship—even if you started the business before meeting your partner. If you lived together for two years or were married, you’re subject to property division laws unless you have a legal agreement that says otherwise.
Without a prenup, postnup, or cohabitation agreement, you’re leaving it up to provincial law to decide how your business is treated.
2. A Relationship Breakdown Can Disrupt Your Operations
Aside from the emotional toll, a separation without a legal agreement can seriously impact day-to-day business operations. Here’s how:
- Your ex-partner might claim part ownership of your business.
- They may demand a buyout or a share of profits.
- You could be forced to sell business assets to divide property.
- Legal fees and court proceedings could drain cash flow and focus.
It’s not just about “losing” your business—it’s about how conflict and uncertainty can cripple momentum and cost you time, money, and reputation.
3. Protecting Your Business Doesn’t Mean Being Unfair
There’s a misconception that prenups or cohabitation agreements are just about shielding assets selfishly. But in reality, they’re about clarity and fairness—for both partners.
Your partner might be supporting the relationship in other ways (raising kids, managing the household, working in a lower-paid job to give you space to grow the business). An agreement can acknowledge those contributions while still protecting what you’ve built.
Prenups and cohabitation agreements help:
- Identify what property is shared and what remains separate
- Clarify how growth or income from the business is handled
- Set fair expectations around spousal support
- Avoid misunderstandings or hidden assumptions
This kind of transparency leads to stronger relationships and smoother outcomes if things change down the road.
4. Investors, Co-Founders, and Lenders Care Too
If you’re seeking outside investment or business financing, having a prenup or cohabitation agreement can increase your credibility and reduce perceived risk.
Here’s why:
- Investors want to know that ownership and control of the business won’t be disrupted by a personal relationship breakdown.
- Banks may be wary of lending to businesses exposed to family law claims.
- Co-founders may want assurance that your personal life won’t jeopardize shared assets or decision-making.
A clear legal agreement signals to stakeholders that you’ve planned for the long-term stability of the business.
5. It Helps You Plan for Life Transitions
Your relationship and business will evolve—whether that means marriage, children, relocation, or scaling your company. A prenup, postnup, or cohabitation agreement helps you adapt your financial plans accordingly.
For example:
- You might start as a sole proprietor and incorporate later.
- Your partner may start working in the business.
- One of you might inherit money and want to invest it into the company.
- You may buy a home together and want to protect your down payment.
Updating your agreement along the way—just like you’d update a will or insurance policy—gives you peace of mind and helps avoid future conflict. We’ve built a straight forward review process into every Jointly agreement.
6. Avoid Expensive Legal Disputes
Legal battles over property and business division can cost tens (or hundreds) of thousands of dollars, not to mention emotional exhaustion.
In the absence of a legal agreement, disputes over:
- Business valuation
- Future earnings
- Income splitting
- Spousal support obligations
…can drag on for months or years, affecting not only you and your partner, but also employees, clients, and investors.
An upfront agreement can minimize legal costs and streamline separation processes, should that ever be necessary.
7. It’s Not Just About Breakups—It’s About Business Continuity
Even if your relationship remains strong forever (and we hope it does!), creating a prenup or cohabitation agreement:
- Forces important conversations early on
- Sets a precedent for transparent communication
- Helps ensure your business plans align with your personal values
It’s like incorporating your business or writing a shareholders’ agreement—good governance makes everything run more smoothly.
8. You Have More Control When You Plan Ahead
The best time to make a legal agreement is before conflict arises. That’s when:
- Emotions are stable
- Communication is healthy
- You both have each other’s best interests in mind
If you wait until a breakup or high-stakes situation, tensions may be high and compromises can be much harder to reach.
Creating a prenup before marriage, or a cohabitation agreement early in your relationship, allows you both to make clear-headed, fair decisions about your finances and future.
9. You Don’t Need a Lawyer to Get Started
The idea of drafting a prenup or cohabitation agreement can feel intimidating, especially if you’re already stretched running a business. That’s why Jointly exists—to make the process accessible, affordable, and clear.
At getjointly.ca, our platform walks you through the steps of creating your own agreement online:
- Use clear, plain-language questions to guide your conversation
- Customize the agreement to reflect your unique circumstances
- Learn how family law applies in your province
- Generate a lawyer-developed agreement you can review, sign, and store
It’s affordable, secure, and takes far less time than traditional legal services.
10. Real Talk: What Could Happen Without One?
Let’s say you don’t make a prenup or cohabitation agreement. Here are a few all-too-common scenarios:
Scenario 1:
You and your partner split up after five years together. You started your business before meeting, but it grew significantly during the relationship. Your partner never worked in it, but they’re now legally entitled to half of the increased value—worth $200,000.
Scenario 2:
You used family money for the down payment on your home and to help launch your online store. Years later, during a messy separation, your partner claims a share of both—and you have no documentation showing those funds were a gift or loan.
Scenario 3:
You’re negotiating a buyout with your business partner, but their lawyer flags that your ex has potential claims against the business. The deal falls apart.
All of these could have been prevented—or at least mitigated—by having a legal agreement in place.
You Built Your Business With Intention—Protect It the Same Way
You’ve taken bold steps to build something of your own. Don’t let a lack of legal planning put it at risk.
A prenup, postnup, or cohabitation agreement gives you:
- Control over your financial future
- Protection for your business
- Clarity in your relationship
- A foundation for long-term success
At Jointly, we make it easier than ever to create an agreement that reflects your life and your values—no legal jargon, no intimidation, no four-figure legal bills.
💼 Ready to protect what you’ve built?
- Why Freelancers, Entrepreneurs, and Online Business Owners Should Get a Prenup - May 19, 2025
- Can I Protect My Assets Without a Prenup? - May 8, 2025
- What Makes a Prenup Invalid? - May 5, 2025
