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How are businesses divided during divorce?

If an individual owns a business or company, one of his or her first questions as the divorce starts is: how will the business be divided and how much of the company will be granted to my spouse?

This is a complex process requiring skilled legal guidance - and knowledgeable representation during negotiations and arguments before the judge. It is left to the judge to decide how much of the business's value should be considered marital and how much is considered separate, thereby exempt from the division. It is also up to the discretion of the judge to decide how the marital property share of the company is to be allotted to each spouse, in a fair and equitable manner.

When dividing the business assets, the judge will evaluate the following criteria:

  • Which spouse was the primary owner of the business and contributed the most to the operations and growth of the company?
  • When was the business founded in relation to the start date of the marriage?
  • What kind of funds were used to start the business (primarily, were these funds separate or marital?
  • Who funded and invested in the growth of the business, contributing to its appreciation in value?
  • What role did your spouse play in the growth of the business?
  • Are there other stakeholders or existing shareholder agreements in place that must be considered?

The judge will determine whether the non-owner spouse is entitled to a share of the business during the division and how much the non-owner should be granted.

The business must be valued to determine an exact amount to be granted to either spouse. It is critical that you have an attorney on your side who is skilled in business valuation and partners with financial professionals to produce the most accurate valuation possible. You can be sure your spouse's representation will be working equally hard to offer a value that is most advantageous to your spouse, so you need to be armed with representation that is equipped to protect your financial interests.

Protect your financial interests and any investment you have made into a company by seeking skilled legal representation with the experience needed to conduct complex divisions. Call Kennedy Law Associates today.

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