If you are a business owner in the state of California, you are most likely very worried about whether your business is on the line, as your business is your pride and joy. You’ve worked years to maintain and build your business, and now the last thing you’d want is to lose it. Please continue reading and speak with our experienced Los Angeles divorce attorneys to learn more about business valuations and how your business may be affected by divorce. Here are some of the questions you may have:
How do courts determine business ownership in California?
Courts will consider a wide array of factors when determining which spouse has a stake in a business. Unfortunately, many business owners find themselves losing at least a portion of their business in the equitable distribution process, even if their spouse never contributed directly to their business. For example, if your spouse contributed to the household, such as taking care of daily chores, raising children, and more, he or she may be entitled to a portion of your business, should you get divorced.
How are businesses valued when business owners get divorced?
When business owners divorce, California courts will have to assign a value to their business to determine how much it is worth in the equitable distribution process. As a business owner, you must provide the courts with all financial documentation concerning your business, and if you do not fully disclose these assets, it may trigger an investigation by the IRS. In many cases, forensic accountants will be appointed to valuate your business, which is why you should have a knowledgeable attorney on your side who can work to ensure everything is done properly and in accordance with the law.
What are some of the most common business valuation mistakes?
Mistakes made during business valuation can drastically affect the outcome of the equitable distribution process, which is why you must hire an attorney who has experience ensuring that these mistakes do not occur. Some of the most common business valuation mistakes are as follows:
- Neglecting to account for temporary business changes
- Failing to apply minority discounts
- Using a valuation method that courts in California do not accept
- Neglecting to disclose all of your assets and liabilities
If you have any additional questions or you are a business owner who is getting divorced, give us a call today. We are here to help.
Contact our experienced Los Angeles firm
Divorce and family law issues are notoriously complicated and personal, which is why you must hire an attorney with years of experience, as well as the compassion and skill needed to handle these sensitive matters. For the qualified, dedicated legal representation you and your family deserve and need, contact Zitser Family Law Group, APC today.