When people say “I do” to one another at the altar, they expect everything they have together to be permanent – including the business they may end up sharing together. Unfortunately, more than half of all marriages, whether it’s the first or the fourth, end in divorce.
When there’s a business in the picture, you’re going to want to bring this up in divorce court. Or even if the divorce has already been finalized, a divorced couple may later decide to go their separate ways in business as well.
If you and your ex or soon-to-be-ex own a business together, or you believe they have ownership rights but aren’t sure, read on to discover what to do next.
Separate and Martial Property
Before determining how a business gets divided up in California court, it must first be decided if the business is considered separate or martial property. Was the business owned by one of the spouses before they got married? Was the business started during the course of the marriage? What roles did both spouses play in the business?
Rest assured that if the court determines that your spouse has zero ownership rights, you are free to do whatever you wish with your business, regardless of your spouse or ex-spouse’s opinions.
What Are Our Options Going Forward?
Depending on whether the business is classified as separate or martial property, there are different options that ex-spouses can look into.
The main three options, including:
- One spouse can buy the other spouse out.
- They can choose to sell the business, and each will receive their fair share of the profits after it’s sold if both are considered owners.
- They can continue to run the business as co-owners.
For the first two options, an appraisal must be performed to determine the value of the business and how much each spouse is entitled to.
Apart from the latter options, in some cases, one or both spouses (depending on ownership rights) may decide to close the business completely or even to transfer complete or partial ownership to the spouse without current ownership.
Protect Your Business. Contact a Family Law and Business Lawyer in California Today.
Torrence L. Howell is an attorney who has been practicing for several years in both Family Law and Business Law. Whether you and your ex or soon-to-be-ex are having difficult deciding who legally owns the business, trying to figure out how to split the business, or determining what the future of the business may entail (e.g., shutting it down permanently, selling it to someone else, letting one spouse keep it, etc.), Mr. Howell can help.
Call Lawyer Howell today at (909) 920-0908 to get a free consultation in Fontana, CA.