The impact of divorce on business ownership

March 25, 2014 (Press-News.org) The impact of divorce on business ownership

Article provided by Anthony C. Williams & Associates, PC
Visit us at http://www.anthonywilliamslaw.com

Many married couples own and operate small businesses together. Both spouses perform essential functions to ensure that the business is able to maximize its profits. The couple may spend a great deal of their time and money trying to keep the company running as efficiently as possible.

When one of these spouses decides to get a divorce, the entire process can quickly become very complex. The parties may not have had any paperwork regarding what would happen to the business in the event of a divorce, and suddenly the parties may be fighting over this very valuable asset. Each side may make certain claims, and in some situations, this could potentially ruin the business's ability to compete in the marketplace.

To prevent these things from happening, couples will need to carefully consider how they wish to handle the future of the business. Does one side want to continue operating the company? Will one of the spouses be leaving the entity or will they want to potentially consider their business relationship? All of these questions will have an impact upon the type of agreement that is created.

In nearly all of these scenarios, it will be important to have financial professionals evaluate the value of the business. This valuation is often the starting point for the division of this property. One spouse may decide to give up assets that he or she is entitled to simply to be able to keep the business, and this is a common solution when one side wants out.

Some business owners may need to develop extremely creative solutions to keep the business operating during the divorce. Failing to take these steps could drastically reduce the long-term value of the entity, leaving both sides upset. Each party needs to be clear about their roles going forward after the divorce is official.

If you are thinking of divorce, you should take the time to prepare so that you have all of the information you need prior to filing. Often emotions run extremely high during the divorce process, and it may be difficult to obtain the financial statements that you need to be able to accurately determine the marital property that you own with your spouse.

You should speak to an experienced family law attorney to learn more about some of the things that you can do to be ready for your divorce. Your attorney can provide you with a comprehensive plan that is specifically tailored for your family's situation. This will allow you to gain a better understanding of the terms being considered, and can help you make the right decisions.