On behalf of North Tampa Legal Group posted in property division on Tuesday, June 21, 2016.
A service business, whether it is a professional practice or a dog-grooming service, may be subject to equitable division in a divorce. If you think divorce is in your future, it’s important to find out now so you will know what to expect.
A professional practice may be the family’s most valuable asset. If so, obtaining your fair share of the value of that business may be the most important part of your property settlement. However, a home-based consulting service with no employees other than the owner may not have value as a business that is divisible.
Is the business marital asset?
The first question you must answer is whether the business is a marital asset. If the owner established the business before the marriage, it may not be a marital asset. However, if the business was started during the marriage, it would be a marital asset even if the spouse was not involved in it.
A business may be a combination of marital and non-marital property. For example, if the non-owner spouse contributed time or money to the business during the marriage, a portion of the business may be marital property even if it was started before the marriage.
How are businesses valued?
There are several ways to value businesses. One is the sale or liquidation value. Another is by the income generated by a business.
Valuation of a business is typically done by an expert based on thorough investigation of the financial records. The value may include intangible assets such as good will. The skill of your attorney is important in obtaining a fair valuation of a business. Selling a business may not be in either spouse’s interests, so obtaining a fair outcome often requires a creative approach to dividing the value.
The Law Firm of Chris E. Ragano P.A. in Tampa represents both business owners and non-owner spouses in business valuation equitable division.