Fighting through marriage trouble can be incredibly tricky, but a divorce is often the best option to ensure that you can live your separate lives happily and also ensure that your kids are given the best future possible. However, things can start to get complicated in divorce law especially when both parties have a business. In most cases, a business’s assets will be split between both partners when the divorce happens, but separating and calculating these finances is incredibly difficult for several different reasons.
Why is calculating the split so difficult?
It’s not just a case of giving half of the shares to each partner. There are many variables to take into consideration such as:
Do both partners have equal involvement in the business?
Does your spouse have absolutely no knowledge of the business and its assets?
Was the business inherited in the past?
Did both partners start the business as a joint venture?
How much has the business grown since the separation?
Has the business declined with the separation?
Could factors caused by a partner directly influence the growth or decline of a business?
Because of all these different factors, it’s not easy to immediately tell what happens to a business during marriage trouble between a couple. A divorce is a complicated separation and it takes a lot of careful calculations if you want to factor in everything. As a result, you’re going to need a dedicated team of legal professionals to help you ensure that the valuation process goes smoothly and accurately.
Valuation of the business
The most important step is to value each business fairly. This often means calculating the appropriate value that a buyer would be willing to pay on the open market. This itself can depend on the type of business. For example, calculating net assets is usually suitable for investment businesses, while earnings are used for trading businesses. Valuation of individual shareholdings is also another method, and historical performance is often taken into consideration as well.
There are many different ways to value a business, but this doesn’t necessarily mean that the business will be sold and the money split between both parties. While a court can force you to sell the business, it’s extremely rare for this to happen and often seen as a last resort to resolve a case. Other variables include loans that the business owner has taken out or any taxes that have yet to be paid, as every single penny will be taken into consideration to ensure a fair divorce procedure
Final words
As you can see, it’s almost impossible to make suggestions on a topic so complicated and involved. However, if you are in the Bergen County, New Jersey, North Jersey or Paramus areas and you’re in need of a professional lawyer to help you with your divorce proceedings, don’t hesitate to get in touch with us and we’d be happy to explain the process in greater detail or answer any questions and concerns that you may have.