When married couples who own businesses together divorce, a myriad of issues arise regarding the business management, ownership, possible sale and path forward arise. This process is further complicated by the emotional aspects of dissolving a marriage.
IS THE BUSINESS A MARITAL ASSET - The initial issue is determining whether or not the business constitutes a marital asset. In South Carolina, typically assets acquired during the course of the marriage are considered marital assets regardless of individual ownership. Exceptions include gifts from third parties, inheritance, bequests, and property included in a pre-nuptial agreement.
DEFINING THE INTEREST OF THE BUSINESS - Once the business is determined to be a marital asset, then it is essential to define the extent of ownership and involvement of each spouse. Factors such as business structure (e.g., corporation, partnership), active management roles, and ownership percentages must be clarified.
Business Valuation: Valuing the business accurately is crucial. Various methods, such as the asset, market, or investment approach, may be employed depending on the nature of the business. Professional valuation experts often use a combination of methods to determine an equitable value, considering factors like minority ownership and marketability.
Division: The court considers multiple factors, including financial and non-financial contributions, health, income, and non-marital property, to decide how to divide the marital estate. This could result in an equal split or a more nuanced division based on individual circumstances. Creative solutions may be necessary to achieve a fair allocation of assets, including the business.
Navigating the Boardroom Breakup: Divorcing business owners face a challenging and intricate process. At Collins Family & Elder Law Group, our experienced attorneys guide clients through these complexities. We collaborate with valuation experts to ensure accurate business assessments. Our team provides comprehensive legal support and compassionate guidance, helping clients navigate toward a resolution.
Whether you're confronting the complexities of business valuation or navigating the legal intricacies of divorce, our team is here to assist you every step of the way.
