Individuals and couples with ownership of or significant share in a particular business, corporation or professional practice face an additional layer of complexity in the division of assets during divorce. To ensure that each spouse receives a fair and equitable share of what is owed him or her, the business must be evaluated and valued.
Divorce For Texas Business Owners — Identification And Characterization Of Businesses And Their Assets
The proper valuation and division of a business in divorce depends on the nature of the business. Corporations and non-incorporated businesses are divided differently.
When a small business is owned as a sole proprietorship, the business must be valued at fair market value. Each asset of the business must be evaluated and included in the possible division. This includes tangible and intangible assets, as well as inventory, equipment, accounts receivable and possibly goodwill. If fair market value is not appropriate, there are other means by which to value the assets.
Professional Practice And Partnerships
Generally, a professional practice is only legally owned by one spouse, as most practices require that a member of the practice hold specific licensure. The value of the practice, however, will still be included in as the assets are divided between the spouses. The final value of the business will hinge on several questions and criteria, including the percentage interest held by the individual and how much the success of the business depends on him or her.
Most partnerships and professional practices have existing agreements in place to provide direction and possibly buy out options for other members if a partner dies or is divorced. We will thoroughly review those agreements and direct our clients accordingly.
Unlike unincorporated businesses, the valuation of a corporation is estimated through equity. Stock and share prices at the date of dissolution will be the primary component. Individual assets of the corporation will not be considered in this division.
Corporations will have existing agreements dictating how the company will proceed in cases of death or divorce. This may include stock options or buy outs. We will advise you as to your options and the best choices.
The business or company being divided reflects years of hard work and investment by both the spouses and often other partners and investors. The division, therefore, is often contested. If the matter goes to trial, you can be assured that our firm possesses the skill, preparation and backing of trusted financial experts to take each case to court. We have been highly successful in the cases with a foundation of 30 years' experience, trial ability and an understanding of what must be done to protect the interests of our clients.
Contact A Houston Divorce And Business Assets Attorney
To learn more about how we can help you navigate all issues related to your relationship with your children, please contact our Houston law firm today at 713-568-3341 or toll free at 866-761-1513. Our office is centrally located in Greenway Plaza, just north of 59 inside the 610 loop and serves clients throughout Houston and surrounding areas.