Getting divorced is especially challenging for women entrepreneurs. You need to know what your business is worth when going through a divorce. If your business is your biggest asset, you need to know the amount to which you are entitled. Here are some steps that will help you to get what you deserve:
Determine the Value of Your Business
Take stock of your business to determine its value. Before the divorce negotiations start, you need to know what it is worth – this ensures that you get an equitable buyout. Separating your individual finances from your spouse’s finances can be a daunting and stressful process.
If you are like most entrepreneurs and your business is your identity, the divorce process will be especially painful. However, knowing how much your business is worth ahead of time will prevent you from taking a huge hit financially. You should consider hiring an unbiased third-party professional who can assess your business with a fresh eye.
The professional should be able to determine the value of the following:
– The building (if owned by your company)
– Equipment such as computers
– Additional real estate holdings
You also need to know how much income the business generates annually and how it will grow over the next several years. If you have been running a partnership with your soon-to-be ex, he might find ways to conceal how much the company makes. Because your ex can find numerous ways to mask the company’s real value, you should consider hiring a professional to work for you.
Division of the Spoils
Once you figure out what your business is worth, you will know the next steps to take: split up the business, keep it, or sell it. The complexity of this process can overwhelm you, so you should consider hiring an attorney. You need to hire attorneys such as custody lawyers San Rafael CA based experts to figure out the custody issues.
Figuring out what to do with the company depends on whether it is jointly owned or in your name. In most cases, spouses do not actually sell their businesses but choose to part with another asset that makes up for the value that they owe. If your spouse is your partner and he started the company before you got married, finding out how much you should get might not be easy.
Make sure that you find out as much about the company as possible. If you use time tracking software such as Clockspot, it might be easier to calculate your business earnings. Did you play a part in expanding the business? You will have to provide some hardcopy proof of your contribution.
Negotiating the Deal
If several partners own the business, there must be a cross-purchase agreement that states what would happen if a partner leaves the firm or dies. Do you want to leave the company after your divorce? The other partners can buy you out of the business or offer money to your spouse so that he can buy you out.
If your soon-to-be ex-husband gives you a cash transfer within the IRS timeframe, it should be tax-free. Because tax is always tricky, you should work with an accountant to figure it out. If your ex offers a promissory note because he cannot afford to pay you off immediately, make sure that you keep the timeframe tight. If he takes too long, the money that you receive might be subject to an IRS inspection.
As you can see, going through divorce is quite difficult for women entrepreneurs. If you follow the above tips, the process will be much smoother.