When couples terminate their marriage, so many other aspects in life become altered along with their cancellation of marriage. The usual issues would definitely revolve around child custody, child support, and division of properties. It all becomes even more complicated once it involves concerns about family business.
Questions arise as to what should be done with the business or who gets what when it comes to the business. That said, we will try our best to explain briefly how divorce might affect your business.
Who Owns The Business
Ultimately, it all boils down to whether or not the business is a common property of the spouses and that is because, most states in America entitles the non-owner spouse shares from the business for as long as it is part of the common property.
If the spouses do not settle among themselves, this is where the court plays its role in determining if there are any shares that should be given to the non-owner spouse. In these cases, business valuation usually follows. Here, the court institutes the valuation of the business and orders the owner-spouse to pay the other party’s share.
If the business was build from a separate property, it does not automatically mean that it is a separate property in itself as well. Similarly, if the business started during the marriage, it does not automatically mean that it belongs to the marital property as well. You will have to look into who contributed to the business? Whose funds were used for the business to function? If the marital property contributed to the business, the business may possibly be treated as a marital property
When both spouses are the business owners, the case becomes more complicated. Several decisions must be made with regards to the business. Shall the spouse continue to own the business together albeit separately? Should the business be closed down? Should one spouse sell his or her shares? Here, the services of family lawyers, like those from The Goldberg Legal Group, or business lawyers will definitely be needed.
At the end of the day, the spouses must not be defeated by pride. They will have to think of what is best for them and for the children. The ultimate goal is reaching an amicable settlement where both parties are satisfied and content with the outcome.
Tips For Business Protection
For those of you who are business owners or are planning to start a business, eventually, and who have been through a divorce or those who are not yet married, you must know how to protect your business.
Prenuptial or marriage settlements are important and must be considered when you have your very own business especially when this business sales are great. Some people also place their business in a trust so as to avoid the chances of it turning into a marital property. Others may be interested in agreements whereby the change of status of the owners would also change the status of the business in such a way that the other spouse will not be able to usurp the business profits. Moreover, your business should also be insured.