Do you want to file for divorce? If so, it might be difficult to make such a life-changing decision. It can impact your emotional and mental well-being. However, that’s not the only aspect taking a hit during divorce. Your assets, especially your business, will also be impacted by the divorce proceedings in addition to any other asset you own.
Your Business: Is It Treated Like Individual Property or Marital Property?
Now, there can be two scenarios:
- If you have started a business during your marriage, the business will be considered marital property and will be divided accordingly.
- However, if you owned your business before your marriage, the increase in business value after marriage will be considered marital property while keeping the original business value as individual property.
It can be difficult to navigate this part of your divorce. Hence, having a professional divorce lawyer Barrie can be beneficial to understand how it unfolds in your favor.
Considerations Involved for Business Division During Divorce:
As mentioned above, your business can be viewed differently depending on when you started or owned the business. Hence, there are several considerations involved in how your business will be divided during divorce.
Here are a few ways it can turn out:
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Valuation of Business:
This is an important step. The business value will be assessed by professional forensic accountants or business valuators. The valuation will include determining the fair market value of the business along with liabilities and assets.
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Equalization Of Net Family Property (ENFP):
In Ontario, a Barrie divorce lawyer will tell you that your assets will be subject to Equalization Of Net Family Property (ENFP). In this, the individual net worth of each spouse is calculated, followed by the increase in the business value. The business value will also be subject to ENFP.
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Co-ownership or Buy-Out:
Another consideration can be whether you want to co-own the business or buyout your spouse’s share of the business. Buying out the business share works easier for both spouses whereas co-ownership of the business can be complicated to navigate after divorce.
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Exemptions or Exceptions:
Unlike Ontario, some provinces like Alberta have exemptions and exceptions for certain properties and assets. In these provinces, businesses might be considered exempted or an exception during divorce proceedings.
There are other considerations involved in dividing your business after divorce such as tax implications, any current business operations, negotiation and mediation, and more. You can call us at Owen & Associates Law to understand where you and your business stand in your divorce process. Our divorce lawyers Barrie will guide you and navigate the divorce process to get you the best possible outcome. Call us now.