One of the most complex legal issues in a divorce happens when one or both spouses own a business. In that event, the ownership interest in the business needs to be divided, or one spouse needs to be paid for their share.
There are a number of issues that need to be addressed in dividing a business. They include:
- Placing a valuation on the business
- Deciding what each spouse’s share of the business should be
- The post-divorce business relationship between the spouses (if there is to be one at all)
Valuation and Business Continuity Are Key Issues
Perhaps the most critical point on this list is valuing the business. The spouse that is being paid for their share will almost always insist on a higher valuation of the business. Each side may bring its own business valuation expert and come up with its own competing numbers.
Some divorced spouses are able to work together after their marriage ends. More often than not, dividing a business means that one spouse will continue to run the business while the other is paid for their share.
The best way to avoid the thorny issue of dividing a business is to sign a prenuptial agreement that lays out the procedures that would be used in the event of a divorce. However, some spouses start businesses after the marriage has begun, leading to these difficult issues. Given how difficult some of these issues can be, you should not attempt to negotiate anything on your own.
Contact a Sacramento Ca Family Law Attorney
If you are going through a divorce, you should have the help of an experienced Sacramento Ca family law attorney. This is even more true when your divorce has complex legal matters. Call the Mason Law Office at 833.770.1372 or contact us online to discuss your divorce and learn how we can help.
