How Will a California Divorce Affect my Small Business?
Getting divorced changes nearly every aspect of your life. If you own a business with your former spouse, you might be worried that you will have to sell your business as part of your divorce proceedings. This is not always the case, but business owners can be very complicated when connected with the divorce process.
If you are worried about what will happen to your California business during your divorce, you need to keep reading to learn more about how this process can impact your business.
What if I Own a Business in California With my Spouse Equally?
In situations where you and your spouse own a business together, the business will almost always be split equally during the divorce. You might be able to buy out your former spouse, but you will not be able to state that you own the business without the involvement of the other person just because you make your primary income from this company.
Both parties will also be responsible for the debts that are associated with the business and with costs to keep it operational so long as it is open for business.
Will I Have to Sell My Small California Business After Divorce?
If you cannot find enough money to buy out your spouse during a divorce, you do have another option. You might be able to find another business partner to offer a fair price to your former spouse to buy them out. The valuation that the divorce requires to be done to establish an assigned value to your business will guide the amount that the purchase needs to be for.
If you cannot find an investor and you cannot buy out your spouse, you might have to sell your business. This can be heartbreaking, but there are instances where this is the financially-responsible thing to do. In cases where the business is sold, the proceeds of the sale will be divided equally unless one spouse has more legal ownership of the company than the other. The sales price of the business will be based on the valuation that is done as part of the divorce process.
Can I Keep Running My California Business With My Ex?
You do have the option to decide that you will not break up the business partnership despite the change to the personal nature of your relationship. This can be a very tough path to follow, however. You and your spouse might be able to get along well enough in the future to manage a business together, but you should be cautious about undertaking this commitment.
California Business Ownership Can be Complicated by Divorce
If you own a business with your spouse and you are getting a divorce, remember that California will consider your shared business community property. You will need to have a plan to buy out your former spouse, or you will need to consider selling the company. If you need guidance, the team at Jabro Law Group can help you navigate the divorce process and help you to hold onto the business that you worked so hard to create.