Do you Co-Own a Business with your Spouse that you are Divorcing?

According to the National Federation of Independent Business, approximately one million businesses are co-owned and operated by married couples. So what happens when the couple decides they want to pursue divorce?

It is essential to maintain the business throughout divorce—especially if it is the sole source of income. If the two parties are unable to agree on an equitable distribution of the business assets, matters can become especially complicated.

The easiest way to go about handling a business during divorce is for one partner to buy out the other; however, this cannot be completed unless a fair valuation of the company is determined. It is important to begin this process early and to settle as soon as possible. Dragging out the process will only lead to further litigation and higher costs, and could also have a negative impact on the business's operations.

However, a financial buyout is not always possible. The partner that wishes to continue operating the company may not have the proper funds to make this happen. Or perhaps both parties play a unique role in the operation of the company, and the other partner cannot easily fill their shoes.

If both partners are needed to operate the company, or neither party is willing to forgo their claim, it may be possible to continue the business relationship despite the dissolution of the marriage. This is more likely to be achieved if the couple dissolves their marriage through mediation or a collaborative divorce. Another option may be to sell the business to a third party and divide the proceeds.

At Claery & Hammond, we do everything we can to help our clients reach amicable solutions to their family law matters. To find out about the services our Los Angeles divorce attorneys have to offer, contact our firm today.