If you own your own business and are going through a divorce, there are many things to consider that are not in a “standard divorce.”
1. Is there a value to your business? Of course, there is a value to every business, otherwise there would be no reason to operate. That said, in many small businesses, consulting firms and other personal service companies, the value is really the owner or person controlling. While the business may enable the owner to have a higher salary than the workplace, is there a saleable interest that has a value separate and apart from the principals?
2. Is my ex entitled to half of of the value? This depends on a number of variables. Was the business started before marriage? Did the business grow during the marriage? Are there any other owners or partners?
3. How do I pay my ex-spouse his/her share of the business? There are few companies with value that have the cash reserves to pay one half of the value. As such, attorneys must often be creative in figuring out how to pay: note over time, as spousal support, with loan from a bank or the ex-spouse may remain as a part (albeit silent) owner. Of course, first we must answe 1 & 2 above before going to #3.
4. How do you value a business and what is the cost? Some businesses have annual valuation, while most do not. A forensic accountant can value a business but it may be rather costly. Often you can get an approximation to value; while this may not be admissible in court, it can assist the parties in working toward a resolution.
Having practiced domestic and corporate law for 22 years and with a degree in Business Economics, I often consult business clients on how to handle legal separation. Often, a case can be made to value a business or simply consider it an income source. If you have questions about valuation and your divorce or dissolution, contact Bouldin Law Firm and schedule an appointment with Michael Bouldin. Call 859-581-6453 or email email@example.com.