When you own a family business with your spouse, you are likely to face the challenge of deciding what to do with your business in the event of divorce. If you have weighed all of your options and decide to divide the family business, there are critical issues you should consider to preserve the value and integrity of one of your most valuable assets.

Placing a value on your business

The first matter you need to deal with is the process of establishing the value of the business. In most family or couple-owned businesses there are discrepancies between the partners in terms of their sense of the real value of the business. There are computer software programs and professional assessors to help you establish a true market value. In establishing the worth of the business you evaluate:

Tangible assets — such as furniture and computer equipment, inventory and accounts receivable

Debts — including payroll, tax liabilities, rent or mortgage

Intangible value — such as good will, reputation and community relations

The process of valuing the business can take several months so it is important to plan accordingly.

Decide on what role you each plan to play

There are some couples who continue to run a family business or work together in some capacity after divorce. If you work together you need to decide how you both plan to manage or change your current working relationship. You might benefit from working with a mediator to negotiate your changing roles during and after divorce.

Explore all options for transfer or sale

You have options in terms of selling the business or retaining part ownership. You may decide to buy out your partner or sell your share to your spouse. If the market is soft you may decide to postpone the sale until the economy is stronger. To have control of these decisions, it is imperative that you make every attempt to reach an agreement and not leave the fate of your business to be decided by a judge.

A Bergen County divorce attorney can be instrumental in assisting you with the sale or division of your family business and all of your divorce issues.

This blog posting and the information on our website is for general information purposes only. Nothing within it, within any responses, comments, emails, answers, blogs or attachments, should be considered legal advice. Our website and our blogs, including this blog, does not form any attorney client relationship, and this office does not represent you in any way. Keep in mind that since only very general information is provided on our website and within our blogs, you cannot rely upon any of the information as legal advice, as it might not apply to, or be accurate relative to your specific situation and facts.

By Jason D. Roth