Connecticut entrepreneurs who are getting a divorce may wonder what will happen to the businesses they own. This will depend upon several factors, including whether they are the sole owners and how long they have owned the business.
The first step is to get a valuation for the business. This is a complex process, so the business owner might want to hire a professional. The appraisal should take both tangible and intangible assets into account. This may include computers and other equipment as well as the reputation and recognition associated with the company’s name. If a spouse owns the business, a person might be concerned about making sure that spouse is not hiding any assets.
If an individual has a partnership with their spouse, the partners may have signed an agreement that addresses what will happen with the business in the case of a divorce. They might sell it or continue to run it. One partner might also buy out the other. If the spouse does not have the money to do this, it may be possible to issue a promissory note, but the other spouse should make sure that there is something to back the note. Another option might be for one spouse to keep an asset of equal value while the other gets the business.
The process of property division is often a complex one, and in addition to dividing a business, it might include splitting retirement accounts, investments, real estate and more. As they are assessing the value of assets, former spouses should make sure they take taxes, penalties and upkeep costs into account. If one person had a much higher income than the other spouse, whether or not either spouse owned a business, the higher-income spouse might be required to pay support to the lower-earning spouse.