Frequently Asked Questions about California Divorce and Business Ownership
When you have a business and divorce becomes inevitable, you need the expertise of a San Diego divorce lawyer. That way, you can determine the best way to handle California divorce and business ownership in your particular case. With the right California family law firm, you can address business ownership and marriage dissolution the right way and get your questions answered. These questions can include concerns such as the following:
1). How are business assets divided?
Business assets can be divided in two ways: the spouses can come to an amicable agreement, or the judge can decide who gets what. The first option is generally the better of the two, but it is also not always possible for the spouses to agree on who is going to receive all or part of a business’s assets and liabilities during divorce proceedings. California divorce and business ownership can be a complex issue to navigate and requires the services of a good attorney who is used to handling those types of cases. How long the business has been owned and whether both spouses have been active in that business can affect the division of assets.
2). Can one spouse be bought out of a business?
Theoretically, yes. If a spouse is supposed to receive half of the business, it is possible for the other spouse to buy them out if both spouses agree. Generally, the amount that would be required to be paid would be much more than just the cost of half of the business based on the business valuation. The reason for that is that the business will continue to generate revenue, and the spouse who is bought out would miss out on that revenue due to not being party to the business any longer. The current value of the business plus what the spouse could have expected to earn may be required to be paid. Of course, this will also be minus the debts or liabilities of the business, as well.
3). Who gets the final say in the division of business ownership during a divorce?
The final say always comes from the judge. That is why it is so important to make sure that the facts can be presented properly. The more knowledge the judge has about how the business has been operated, the better decision he or she can make when it comes to dividing the business during a divorce. It is possible that the business will be solely granted to one spouse or the other, but it is more likely that there will be some division of it between the spouses, especially if they were both active in it, or if the business has been owned for a long time during the marriage.
4). What steps can be taken to protect a business from divorce losses?
Protecting a business can be accomplished based on how it is initially set up and how much both spouses work at the business. If one spouse primarily owns and operates the business, and that is provable, that can provide more protection. It is best to keep only one name on the registration documents, contracts, business cards, and other identifying features of the business in order to ensure that the business can be owned by only one spouse in the event of a divorce. This is not always possible, however, especially if divorce was never expected and comes as a surprise to the unsuspecting spouse. Issues about how to divorce-proof your company.