You and your soon-to-be-ex-spouse invested a lot of time and energy into a business. With your divorce, you may worry about your current spouse selling the company.
Chron explains the ins and outs of selling a business in divorce when spouses built the entity together. Educate yourself so you may better protect your hard work, assets and professional prospects.
Because you live in Kentucky, an equitable distribution state, courts split property equally or fairly in divorce. When determining how to divide your business, a court considers factors like your income and the length of your marriage.
You and your soon-to-be-former partner must also consider your separate ownership rights to your business. If you have ownership rights in the company, then your spouse cannot sell it before you finish the divorce process. You also retain your ability to make decisions as a business owner while completing your divorce. Expect the court to classify your company as marital property, which means you should also expect to offer your spouse compensation for his or her business share.
Does your spouse have a claim to a percentage of your company? If so, he or she may request a professional appraiser to determine your business’s value and her or his compensation. Appraisers consider such factors as inventory and tax returns when calculating your company’s worth.
Perhaps you want to sell your business rather than your current partner. If so, your spouse may file a restraining order to block you from transferring business ownership or selling the company during an ongoing divorce.
You may have a lot of anxiety regarding your business’s future. With the right knowledge, you may create a strategy that keeps you in the driver’s seat, no matter what.