Business Entities and Divorce
In some divorce cases, the distribution of property can be complex. The distribution can be much more complex if one or both spouses owns a business entity. In many cases, the business entity is considered marital property and is therefore subject to equitable distribution upon dissolution of the marriage. Because businesses can often produce significant income and have significant value, it is important to understand how business ownership and divorce interact.
The first step to take when going through a divorce where a business entity is at stake is to have the business valued. The value of a business is much more than simply the income it produces. The value of the business must also consider the assets and liabilities of the business, the future business potential, and the goodwill of the business. It is important to obtain a valuation of the business so as to gain a better understanding of what the business is worth as a marital asset. There are accountants and other experts that specialize in this area. However, these experts can get very expensive. Thus, you will want to weigh the cost of the expert against the potential value of the business.
Most of the time the businesses are not divided like other marital property. Instead, there are several different things that can happen with the business, such as:
The spouses may separate different aspects of the business into individual businesses with each spouse retaining one of the businesses.
One spouse may buy out the other spouse and continue to operate the business.
The spouses may continue to work together. It is possible, although rare, to remain business partners after a divorce.
The business can be sold and the proceeds will be split.
A business entity is an added wrinkle in divorce cases, but with an experienced attorney even the most complex of situations becomes manageable.
Call us anytime at: (855) 953-3529
Free initial consultation. All major credit cards accepted.