When you and your spouse founded your company, you never considered divorce and what would happen to the business as a result.
Under Wisconsin law, your business is a marital asset that, like other assets, is in line for equal division. How will this work?
Considering three options
Basically, you have three options to consider with respect to the distribution of your business.
– You could put the business on the market and split the profits. However, if the business does not sell quickly, you and your spouse might have to continue working together longer than you anticipated.
– You could perform a buyout. One of you could purchase the other owner’s interest. If funds to do so are not readily available, you could offer assets of like value as payment.
– You and your soon-to-be-ex could keep the business and continue as co-owners if you believe you can go on working together despite the divorce.
Valuing the company
If you decide to sell the business outright, or if you choose to perform a buyout, you will need the services of a professional who can place a value on the business in order to arrive at an appropriate price. In terms of distribution, the court will consider the fair market value of the business, generally defined as ‘the price at which the property would change hands between a willing buyer and a willing seller … and both parties [have] reasonable knowledge of the relevant facts.”
Your company may well be the most significant asset you and your spouse own, but you may disagree over the worth of the business. The court will consider various factors in determining equal division but if you decide either to sell or effect a buyout, a professional valuation will be central to the ultimate decision.