How to Manage a Small Business Through Divorce
Any entrepreneur knows the work, time, and money that goes into building a successful business. That is why the fate of a small business is of primary concern to those going through a divorce. Business owners must take special care to avoid the possibility of any conflicts or disputes disrupting the flow of daily operations.
At Berenji & Associates, our divorce attorneys understand the unique challenges entrepreneurs face in divorce settings. Many of our clients are local business owners in the Los Angeles area. That is why we have put together this quick guide to getting through divorce while maintaining a healthy business. If you need more information, call Los Angeles divorce lawyer Hossein Berenji for a free case evaluation.
Many couples do not know the laws surrounding ownership of property in a marriage. If you own a small business, one of the first steps you should take in your divorce is to determine if your business is “marital property,” or property to be divided between you and your spouse. Unless you started your business before your marriage or made special arrangements with your spouse ahead of time to retain sole ownership, a court is likely to deem your business marital property.
Come to a Valuation
If your small business is in fact marital property, you, your spouse, and the court will need to agree upon its monetary value. You will likely need to hire a business-valuation firm for the job. This firm will take a hard look at your business, coming to a figure that you can use at a later date in buy-out agreements or in dividing up ownership. These services can be expensive, so it is best if possible to agree upon one firm with your spouse ahead of time and split the costs of the service. If this is not possible, your attorney can help you defend your business valuation in court and negotiations.
Avoid Splitting the Company
Many spouses are tempted to avoid valuation expenses and other costs of transferring business ownership by simply splitting ownership in half. Unless you have a positive working relationship with your partner, however, this is likely a bad idea. Having two decision-makers perpetually in conflict can paralyze a business. Instead, think about alternative set-ups like offering another piece of property in exchange for full business ownership, or other arrangements that offer a piece of ownership without decision-making authority. These will help your business thrive and succeed down the road.
Get Help from an Experienced Attorney
Divorces involving small businesses require the skill and diligence of a committed family law attorney. If your lawyer is not working for you 100 percent, the health of your business can suffer. In choosing an attorney, make sure that he or she has experience in divorces involving businesses and other complex financial matters. This will go a long way toward ensuring that you get the representation you deserve.
At Berenji & Associates, we help individuals in Los Angeles protect assets like small businesses through all types of divorce proceedings. If you require skilled legal representation from an experienced divorce attorney, we can help. Contact us today to set up a meeting.
Berenji & Associates
9107 Wilshire Blvd #750
Beverly Hills, CA 90210