The physical separation involved in a divorce can be obvious and expected, but the economic separation is far more complicated. If the divorce involves a business that the spouses own together, then that separation can become even more contentious.
Unlike most marital property that can be neatly transferred with a quick signature, a business that is jointly-owned requires far more careful consideration. While it is possible that two people who did not work together in marriage can continue to work together in a business, many couples in this situation often have to seek an alternative course of action.
Chester County Jointly-Owned Business Lawyer
If you are in the process of ending your marriage and you jointly own a business with your spouse, you will want to be sure to work with an experienced Pennsylvania divorce attorney. Ciccarelli Law Offices is based in West Chester PA and helps clients all over Chester County and surrounding areas in Philadelphia County, Montgomery County, Lancaster County, and Delaware County.
We understand the enormous emotional and financial value that a business has to its owners, and our firm will fight to get the most favorable outcome to any dispute over a business endeavor you jointly-owned with your spouse.
Call (610) 692-8700 or send an online message for a free consultation so we can act as soon as possible. We are based in West Chester PA and serve clients throughout Chester County, Lancaster County and suburban Philadelphia including West Chester, Kennett Square, Oxford, Avondale, Landenberg, West Grove, Paoli, Malvern, Downingtown, Coatesville, Exton, Parkesburg, Berwyn and Devon. We have convenient meeting locations in Lancaster, Philadelphia, Plymouth Meeting, Kennett Square, Malvern, Springfield, King of Prussia, and Radnor. Our family lawyers serve those with immediate legal needs in Chester County, Montgomery County, Delaware County and Lancaster County.
Chester County Jointly-Owned Business Divorce Overview
- What kinds of agreements can spouses make in these cases?
- What does the court consider when equiably dividing these types of businesses?
- Are there any other factors that might play a role in the court’s decision?
Jointly-Owned Business Resolutions in Pennsylvania Divorce
When spouses who jointly own a business prepare to divorce, there are three alternatives to having a court decide which spouse will maintain control:
- Continue to Jointly-Own the Business — If spouses can remain cordial, it may be possible for them to maintain co-ownership of a business without any additional issues. However, be forewarned that any hostility in divorce proceedings could make this proposition easier said than done.
- Sell the Business — In some cases, spouses may prefer this option to completely sever all financial ties to one another. While selling the business can allow spouses to divide the profits and move on as they would like, it could take several months or even years before the couple finds a buyer.
- One Spouse Buys Out the Other — Assuming that a couple has the assets necessary to complete such a transaction, one spouse could simply pay for the other spouse’s interest in the business. If the spouse who is attempting to gain ownership of the business does not have the cash on hand needed for a transaction, it may be possible to make other concessions—such as the amount of equity in a home or other assets—to complete a buyout.
Equitable Division of Chester County Jointly-Owned Business
Much like any other property involved in a divorce, a business that is jointly-owned by the spouses may be equitably divided by the court. Keep in mind that the term equitably does not mean equally. Under Pennsylvania Consolidated Statute Title 23 § 3502, the following factors that are relevant to marital property could also apply to a business co-owned by spouses:
- The length of the marriage
- Any prior marriage of either party
- The age, health, station, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties
- The contribution by one party to the education, training or increased earning power of the other party
- The opportunity of each party for future acquisitions of capital assets and income
- The sources of income of both parties, including, but not limited to, medical, retirement, insurance or other benefits
- The contribution or dissipation of each party in the acquisition, preservation, depreciation or appreciation of the marital property, including the contribution of a party as homemaker.
- The value of the property set apart to each party
- The standard of living of the parties established during the marriage
- The economic circumstances of each party at the time the division of property is to become effective
- The Federal, State and local tax ramifications associated with each asset to be divided, distributed or assigned, which ramifications need not be immediate and certain
- The expense of sale, transfer or liquidation associated with a particular asset, which expense need not be immediate and certain
- Whether the party will be serving as the custodian of any dependent minor children
Additional Factors in Dividing Pennsylvania Jointly-Owned Business
After a business valuation for divorce has been completed, some of the other factors that may be instrumental in dividing the business include:
- Each spouse’s involvement — Does one spouse put in considerably more time with regards to daily business activities?
- Ownership percentage — Does one spouse own a larger share of the business?
- Each spouse’s value to the business — Does one spouse have a more integral role with employees or customers?
- Division of rest of marital estate — Is one spouse conceding or receiving more assets?
- Each spouse’s ability to earn income — Does one spouse have a greater earning capacity because of education, experience, or special training?
In some cases, it may be determined that a business can neither be divided nor sold. It is important to have legal representation so you can give yourself the best chance of obtaining the most desirable outcome with regards to your business.
Finding A Jointly-Owned Business Lawyer in West Chester
You should not have to completely relinquish control of a business that you helped build with your spouse even though you are in the process of a divorce. Ciccarelli Law Offices can negotiate to make sure that you either maintain control or receive fair compensation for your efforts. Call (610) 692-8700 to let us review your case during a free consultation.