Every year, more than 600,000 new businesses are opened. Although the survival rate for small to mid-sized companies is not high, many do thrive and become lucrative revenue streams. However, when the founder or co-founder of a business files for divorce, complications arise. Courts will consider the business’s assets and liabilities to fairly and equitably divide all property among the divorcing spouses. Business owners should seek the counsel of a family law attorney on how to navigate this aspect of a divorce settlement.
If a family business is run by the divorcing couple, both spouses most likely spent the same amount of time getting the company started. A court may decide to give equal shares of the company to each party. In certain situations, divorcing couples may decide to keep working as usual, putting the company needs above their own. In other situations, one spouse may sell their share to the other, or sell the share to a third party.
If one spouse founded the business, it might seem reasonable to assume that the founding spouse will receive all the assets from the business during a divorce. Yet, that is not always the case. Pennsylvania family law courts take many aspects of running a business into consideration, including the support offered from the spouse who was not involved in the company. For instance, a stay-at-home mother might have handled all the household responsibilities so her husband could launch the business. Consequently, some of the assets from the business may be directed to her.
Determining which party started and ran the business is only one aspect of how businesses can affect a divorce. Other situations that complicate matters further include:
If you are planning a divorce and have a family-owned business, contact a Chester County family law attorney from Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. Our lawyers can help you reach a fair, equitable settlement or arrangement. Contact us online or call us at 610-565-3700 for an initial consultation today. Located in Media and West Chester, Pennsylvania, we serve clients from the surrounding areas, including Delaware County, Chester County, and Montgomery County.