Los Angeles Business Divorce Lawyer
Divorces in Los Angeles, California, can involve complex issues. If you are considering separating from your spouse and you own a business, it is crucial that you hire a Los Angeles business divorce lawyer to help you protect your interests. Dividing an interest in a business or protecting a business as separate property requires experience and skill.
At Berenji & Associates, our California divorce lawyers have extensive legal knowledge and experience handling complex cases. We develop strategies and settlements that protect your best interests. We’ll fight to get you the favorable outcome you desire.
Protect your right to retain your fair share of a business asset during a divorce. Call Berenji & Associates today at (310) 271-6290 to schedule a consultation with one of our trusted family and divorce lawyers.
How Berenji & Associates Can Help With Your Business Divorce in Los Angeles
Property division can cause tension and frustration during a divorce. Each spouse wants their fair share of the marital assets. Unfortunately, your spouse might want more than their share of your business.
Correctly valuing your business and protecting its status as separate or marital property can be challenging. Even though California is a community property state, dividing a business is rarely easy. Our Los Angeles divorce attorneys understand what is at stake and the importance of protecting your interest in a business.
When you hire our top-rated divorce lawyers in Los Angeles to handle your case, you can expect our attorneys to:
- Explain California’s community property laws and how they impact your business
- Develop a legal strategy that protects your best interests
- Work with you to gather evidence regarding your business, including the company structure, business assets, and debts
- Hire experts to assist in valuing the business
- Diligently pursue divorce mediation and collaboration to negotiate a fair settlement
- Prepare your case and go to trial if that is the best way to protect your business interests
Our attorneys have over 45 years of combined family law experience, which gives them the knowledge to handle complicated matters related to dividing a business in a divorce. Our attorneys personally handle and oversee all matters related to your divorce case. Our experience and dedication have resulted in high ratings by Super Lawyers, The National Trial Lawyers, Avvo, and other organizations.
Contact Berenji & Associates to schedule a consultation to discuss your situation with an experienced business divorce lawyer in Los Angeles, CA.
Determining Who Owns a Business in a California Divorce Case
California is a community property state. You and your spouse own equal shares in the marital property. Therefore, you should divide marital assets 50/50 in a perfect situation. However, property division is rarely that simple in a divorce case.
Community property typically includes all assets, property, and income acquired during the marriage. Therefore, your marital estate may include a business you own or an interest in a business venture.
Before dividing property in a divorce, we must determine whether the property is separate or community property. Separate property is anything you owned before you were married. Unless you commingle separate property or otherwise change its classification, separate property remains your assets during a divorce.
Therefore, if you owned your business before you were married or started the company after a legal separation, your spouse may not have a claim to the business. A business you allowed to become dormant or did not actively participate in during the marriage could also be classified as separate property.
However, income from the business may add a complicated layer to the property division. The income you earned during the marriage is community property. If your spouse works for the business, their income would be considered community property. Investments your spouse made in your business could also complicate matters.
How Do I Determine the Value of My Los Angeles Business for My Divorce?
Calculating the value of a business may require hiring a professional business evaluator, who is an expert in determining the current value of a business or business interest. We may also hire forensic accountants and other experts to evaluate the company’s financial transactions.
When a business is involved in a divorce case, obtaining all financial documentation for the business is generally the first step in the process of valuing the business. Experts use the company’s financial information, market trends, consumer demand, and other relevant factors to determine how much the business would be worth if you sold it.
Mistakes in the Business Valuation Process Could Impact Property Division in a Los Angeles Divorce
Business owners often make mistakes when valuing their company, resulting in overvaluing or undervaluing the asset. Some errors are honest mistakes, while others are intentional to try to conceal the actual value of the company.
Mistakes Los Angeles business owners make when valuing their companies for a divorce include:
- Failing to account for all assets the company owns
- Not listing all debts the company owes on the income statement
- Failing to account for temporary or seasonal fluctuations in business revenue
- Mistakes valuing goodwill and other intangible assets
- Using a valuation method not approved by the courts
- Failing to include one-off charges or unusual circumstances in the calculations for business valuation
- Not applying the rules governing minority discounts
- Failing to account for the impact of cross-purchase and buy-sell agreements on the company’s value
The structure of the company and other factors impact the valuation of a business. To avoid problems, you should hire a Los Angeles business divorce lawyer with extensive experience handling divorce cases involving business assets.
At Berenji & Associates, our Los Angeles divorce attorneys have decades of experience handling complex property division cases. We’ll work with you to obtain a fair outcome.
Can I Buy My Spouse’s Interest in the Business Instead of Dividing the Company During a Los Angeles Divorce?
It may be possible to buy out your spouse’s interest in a business during your divorce. However, to ensure that you pay a fair price for your spouse’s share, you must have an accurate value for the business.
Furthermore, you must account for your spouse’s interest in the future income the business generates after your divorce. Therefore, buying your spouse’s interest in a business may not be as simple as offering them one-half of the company’s present value.
However, if you want to retain sole ownership of a business, your only option may be to purchase your spouse’s interest in the company. Then, your spouse would no longer have any ownership rights to the company.
Who Decides How To Divide a Business in a Los Angeles Divorce Case?
There are two ways business assets are divided in a California divorce case. You and your spouse negotiate a property settlement agreement that includes dividing the company. If settlement is not possible, a judge determines how to divide the business in a contested divorce.
Factors to consider when dividing a Los Angeles company during a divorce include, but are not limited to:
- The beginning date for the business
- The tax implications for various division scenarios
- The roles of each spouse in operating the business
- The type of business, including whether the company’s success heavily relies on a spouse’s involvement with the company
- Whether the business can continue to operate without a spouse’s involvement
- If a spouse’s special education, skills, or training are critical for keeping the business going
A negotiated property settlement often gives spouses the best chance of achieving a positive outcome for their case. When you fight the case in court, you cannot be sure how a judge will rule. Even if you present what you believe is a solid argument as to the value and ownership of the company, a judge might disagree.
How Do Business Debts Impact Dividing a Business During a Los Angeles Divorce?
Business debts are also classified as community property or separate property. Even if one spouse is signed to be responsible for repaying a debt, both spouses are responsible if the debt is related to community assets. Therefore, business debts must be allocated when dividing property during a divorce.
A common method used to allocate business debt is to base the allocation on the portion of the business a spouse receives. Therefore, if you receive 60% of the company, you are responsible for 60% of the business debt.
There are several ways to handle business debts in a divorce. Our Los Angeles business divorce lawyers analyze the company’s debts and how they impact property division, including considering any unique factors in your case.
Schedule a Consultation With Our Los Angeles Business Divorce Lawyers
Don’t risk losing your business in a divorce by hiring an inexperienced lawyer. At Berenji & Associates, our attorneys have the skills, knowledge, experience, and resources you want on your side when you begin dividing property in a divorce.
We will explore all options to determine the best solution for your situation. Call (310) 271-6290 today to speak with one of our Los Angeles business divorce attorneys.