Divorce is difficult on many levels. There is no question that both spouses deal with emotional turmoil, and most marriages experience a certain amount of financial upheaval during a divorce. However, if one or both spouses is a Texas business-owner, that business may also suffer during asset division. Before decisions can be made about how to handle the company as a marital asset, a business valuation may be in order.
If no prenuptial or postnuptial agreement exists, the parties involved can expect the business to be carefully scrutinized. Attorneys for each party will arrange for the valuation of the business, or to avoid a disagreement, the business may hire one appraiser. The parties can agree to accept that valuation. The professional that values the business will examine the financial books and question the staff about expenses and practices of the business.
The routine of the staff may be disrupted to assist those working on the valuation. They may be asked to produce financial documents and discuss details about the operations of the company. If the business has multiple owners, the partnership may try to arrive at a way to preserve the business while allowing for fair asset distribution for the divorcing partner and his or her spouse. This may involve buying out the divorcing partner or offering structured payments to the spouse so the business remains intact.
On the other hand, every Texas business and every divorce has its own special circumstances. There may be options available that the couple never considered. This is the advantage of working with an experienced attorney regarding the business valuation. The right attorney will go beyond counting the inventory but will rely upon a variety of resources to achieve a complete value of the entity, including those intangibles that make a business unique.
Source: foxbusiness.com, “How to Minimize the Impact of Divorce on Your Small Business“, Jennifer A. Brandt, Accessed on March 12, 2017