Could My Divorce Affect My LLC?

 Posted on May 23, 2018 in Family Businesses

Owning a business with a spouse is a relatively common practice, and while many of these types of businesses are successful and lucrative, they can also raise a host of complicated issues in the event of a divorce. This is because couples who own companies together must grapple with dividing the business if they later decide to dissolve their marriage, which can be difficult if both parties wish to retain an active role in management or there is disagreement regarding the value of the company itself. For help addressing the fate of your own company after divorce, please contact a member of our high asset divorce legal team for advice.

The Importance of Business Appraisals

The first step in these types of cases is to determine the value of the business in question, as this will affect how and whether the company should be divided between the spouses. Like any other asset, there are professionals who specialize in appraising businesses. These individuals assist divorcing couples who own a business together by determining the fair market value of the company, which refers to the amount that a buyer would be willing to pay for a business from a seller who wants to sell but is under no necessity to do so.

Determining When the Ownership Interest Was Acquired

One of the most important aspects of dividing an interest in an LLC is to determine whether the interest was acquired before or during the marriage and whether it was purchased with community property or separate property. The answers to these questions will help dictate the fate of a divorcing couple’s company. For instance, a spouse who purchased an interest in a company prior to marriage and who did not use marital assets to contribute to that company during the marriage may be able to retain sole ownership upon divorce. If, on the other hand, the interest was acquired during the marriage and was purchased with marital assets, one spouse would most likely need to buy the other out or would need to sell the interest and divide the proceeds as directed by the court.

Questions About Your Divorce? Call Our Georgetown Legal Team Today

Handing the division of an LLC or another type of family business is complicated, as it requires an understanding of both complex business-related laws and divorce procedure. At Powers and Kerr, PLLC, our dedicated Leander high asset divorce attorneys understand the intricacies involved in this type of case and advocate tirelessly on behalf of our clients to reach solutions that will give them the best chance at a successful future. Please contact us today to learn more about how we can help you manage your divorce.

Sources:

https://scholar.google.com/scholar_case?case=5961346897587714537&q=Wendlandt+v.+Wendlandt,+596+S.W.2d+323&hl=en&as_sdt=2006

http://www.statutes.legis.state.tx.us/Docs/FA/htm/FA.3.htm