Divorce can be a difficult proceeding generally, but it is even more difficult when you add in the complexities of dividing a jointly owned business. How will it be dealt with fairly? The first things to consider are the value of the business and which spouse had greater involvement with the business or was involvement equal?
In most cases, a court will award the business to the party most involved with the business. However, it also means that the other party needs fair compensation for their involvement. This stage is where the valuation of the business needs to be determined. Usually, a CPA or ABV evaluates all of the business’s financial information, and future financial income may also be a factor in determining fair compensation. The court may also determine that an audit is necessary to ensure the validity of the valuation results. This determination is especially important if there is concern that one party is attempting to hide information that would make the business appear more or less valuable than it is.
Suppose involvement in the business is equally shared, and both parties can demonstrate the ability to maintain a civil working partnership. In that case, a court may rule that it continue to operate jointly. In cases where neither party wants to keep the business or where the business assets cannot fairly compensate the other party, a court may rule that the business be sold and the proceeds from the business divided.
The reality is divorce is complicated, and owning a business is also complicated. When the two are intertwined, it creates an even bigger complex and lengthy process. It is essential to consult with an attorney experienced with divorces involving businesses to ensure the fairest possible outcome.
If you are interested in legally ending your marriage or would like to discuss your rights, please call our Akron divorce attorneys to make an appointment to discuss your potential divorce. If you have already been served with divorce papers by your spouse, you need to retain an attorney right away, as you need to meet court-required deadlines. Call us at 330-922-4491 or contact us online to schedule you for an initial consultation immediately.