When you and your spouse have worked hard to build up your business, you don't want anything to yank it away from you. If you are married and decide to go through a divorce, there is a chance that you will have to address issues with the business.
There are several things that you must think about, especially if you aren't currently a part of the day-to-day operations of the business. Make sure you think about these three points so that you can ensure that everything regarding the business during your divorce is on the up-and-up.
#1: The valuation of the business is important
The primary factor that you have to think about when it comes to the business is the valuation of it. The valuation of the business is much more in depth than just having a look at the income for the business. In fact, sudden income deficit syndrome, or SIDS, is an issue in some divorces when only one spouse handles the books. You have to be on the lookout for a sudden decrease in income, especially if this occurs just before the divorce filing. In almost all cases involving a business, you should hire a forensic accountant to help you go through the finances of the business so that you can accurately determine the value of the business.
#2: You can determine the fate of the business
The fate of the business is something you and your ex have to decide. You can continue to run the business as it is now if you and your ex can get along in a professional manner. One spouse can buy the other spouse out if only one person wants to continue to run the business. You can close the business and liquidate the holdings. You can sell the business. Some of the options might not be possible in your case, so you should make sure that you think carefully about each option before you make a choice.
#3: Make sure the agreement is clear
No matter how the business is handled, make sure that the terms of the arrangement are spelled out clearly in the divorce paperwork. This ensures that if there are any problems that arise, you can turn to the order to determine how the issue must be addressed. This is especially important if you are going to run the business together since you can clearly define roles in the agreement you sign with your ex.