Dividing a Business in a California Divorce

Business protection in divorce

America is the land of entrepreneurs and self-made business owners. If you are among them, you know just how difficult it is to start a business and keep it operating long enough to become profitable.

Unfortunately, businesses often suffer during the divorce process, especially when spouses disagree on joint operations. Managing those pressures with early solutions (such as developing an interim operating agreement), can help protect business profitability and goodwill for both parties’ benefit. Determining the community property value of a business started during marriage, or the character of a pre-marriage business, is a challenge that requires legal and forensic accounting expertise.

Working With A Business-Savvy Attorney

Successful business protection in divorce can sometimes come down to hiring the right lawyer. It is crucial to work with a family law attorney who understands how businesses operate, how they are valued and how they can be shielded from the damaging effects of a divorce. At States Family Law, I regularly help owners or “out spouses” define and protect their interest in business value and income, and I can help you, too.

I have extensive experience in this area, an intersection of family law and business law. Here are just some of the services I offer:

  • Collaborating with forensic accountants and other professionals to accurately value the business and the community property interests

  • Assisting owners with co-management disputes between spouses while the divorce is proceeding, thereby keeping the business in operation during this difficult period

  • Helping clients avoid receivership when they are unable to agree on a management plan

  • Determining income available for payment and support (this often comes up in business divorces)

  • Helping clients understand all available options for the business after divorce

What Will Happen To Your Business?

Before you decide on a strategy for your business post-divorce, it is critical to determine the value of the business and the share that each spouse owns. When that information is known, you may have several options:

Spousal buyout: You can agree to buy out your spouse’s share in the business, either through a direct payment or through offsetting the value with other assets during the property division process. If your spouse has been primarily responsible for running the business, you could also agree to sell your share to him or her.

Selling the business to a third party: If neither spouse wants to keep the business (or cannot agree on a buyout option), you may decide to sell the business to a third party. Assets from the sale would be divided according to each spouse’s ownership stake.

Business Liquidation: In certain circumstances, it may be desirable or necessary to simply close the business, sell off the assets and divide the income appropriately.

No matter which option you choose, I am an attorney with the business knowledge and acumen to guide you through the process. I understand how all types of business entities operate, and will work to help you achieve the outcome that best meets your needs and goals.

Contact The Firm Today To Discuss Your Case

States Family Law is a Sacramento firm offering skilled representation in divorce and all other family law matters. To learn more about how I can help you, call me at 916-696-2425, or fill out this online contact form.

Contact Me To Discuss Your Case

Based in Sacramento, my solo practice allows me to give each client the personal attention and care they deserve.

To schedule an appointment, call 916-696-2425 or fill out my online contact form.

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