When a business is privately owned, it is generally considered an asset. Similar to a marital home, you have to determine the value and divide it equitably in a divorce. However, there are some exceptions. A well-versed Orland Park attorney can discuss what will happen to your business in a divorce.
Our dedicated division of asset lawyers can advocate for your interests throughout the divorce process. We understand how hard you worked to build your business and can help you make sure you reach an agreement that is right for you.
As defined by Illinois law, a privately-held business is a business with one or more owners who control the entity. There are different ways someone could form a business, such as a partnership, a corporation, or an LLC. If it is a privately-held business that is owned by a married couple, it is subject to equitable division.
The valuation of a privately-held business plays a role in dividing assets. Often, determining the value of a business and how to divide it can become incredibly contentious. One would want to get a business valuation in which the owner has to turn over all the books. They would want to have a professional accountant that knows how to value a business. Depending upon the business, there might be some physical assets within the business that are also part of the value, such as equipment, tools, or furniture.
Depending upon the value and who is going to be awarded the business, the court may offset the other assets to the other party. For example, if the person running the business is going to keep it, they might have to offset the value by buying out the other person with the other assets available.
Without a marital agreement in place that addresses ownership of a business, it is generally considered to be held by both people. The ownership of the business should be established at the formation of the business. If it is a sole proprietor enterprise, for example, if someone opened their own business using their own Social Security number and bank account, it is probably presumed to be marital property if it was started during the marriage.
Usually, a person has to file paperwork with the state if they want to create a business. This paperwork would determine the owner. However, who owns the business is not an important issue in terms of dividing the property. Instead, the court will consider whether it was formed during the marriage. If the answer is yes, they need to figure out an equitable way to divide it.
The court will generally consider a business marital property if it was created during the marriage. However, a detail-oriented attorney can thoroughly investigate your businesses to determine your options in a divorce. To discuss privately held businesses, call an experienced Orland Park attorney today.
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