Understanding Your Options For Business Distribution In Your Divorce
As a business owner, filing for divorce creates a complex situation. You and your spouse will have to come to an agreement about how your business is handled in the settlement. There are a few different solutions available to you depending on the nature of your relationship, the structure of your business, and any future plans. Understanding the basics of your options helps you decide on the best way to handle your business during your divorce.
Can You And Your Spouse Still Work Together?
Sometimes, in the midst of an amicable divorce, former spouses are able to work together as co-owners of a business. Whether you work opposite shifts or you're able to maintain a cordial working relationship, sometimes you can retain the business and continue operating it with an even distribution of profits. Just make sure that your divorce settlement agreement defines the distribution of profits so that you both get an equal share of the company's revenues.
Should One Of You Buy Out The Other?
Another option for handling your business in the divorce is for one spouse to pay the other for their share. If one of you has the financial means to buy out the other and the desire to operate the business on their own, this is a viable solution.
In order to opt for a buyout in the divorce settlement, you need a clear valuation of the company to establish a basis for the transaction. In most divorce cases, that means hiring an independent business valuation specialist. The valuation specialist can assess the business and assign a value based on that assessment. That value serves as the foundation for your buyout and the separation defined in the divorce settlement.
Would You Rather Sell The Business?
If you and your spouse are unable to work together and the idea of a buyout is not agreeable, you may need to sell the business instead. In this case, you also need to have a business valuation to set the target for the sale. If both spouses are listed as owners of record, both must agree to the buyer in any sale transaction. The profits from the business sale must then be divided according to the asset distribution determined in the divorce settlement.
Understanding the solutions available to you will help you and your spouse decide how best to handle the business as you come to your divorce settlement. Aiming for an equitable distribution of assets sometimes means having to buy out one business partner or sell the business entirely.
For more information, visit a divorce attorney website, such as http://gomezmaylaw.com/.