How Does A Port St. Lucie Divorce Affect My Business?
The nation’s thirty million small businesses employ almost half the country’s workforce. Over the past several years, these businesses have grown faster than large employers, or companies with more than 500 employees. Micro-Businesses with fewer than ten employees are doing especially well.
Small businesses may mean more to Port St. Lucie families than they do to the economy. Many times, the business is the family’s only source of income. Additionally, many owners invest a lot of “sweat equity” into their businesses. These economic and noneconomic qualities have significant ramifications in divorce cases.
What Happens to the Business
Divorce does not necessarily mean the end of a small business. Some co-owners are better business partners than spouses. So, many times, the business may continue uninterrupted. An attorney can often negotiate some ground rules, such as daily schedule rotations or separate business tasks.
Offsets are very common as well. Many owners are willing to pay more alimony or give up a larger property share to keep the business intact. In other cases, the non-owner spouse might continue to receive a percentage of business profits.
Keeping the business intact and in the family is often in everyone’s best interests. However, that outcome is not always possible.
Valuation Methods for Florida Businesses
Property classification must take place before division begins. Classification is not always as simple as it seems.
Business goodwill is a good example. Goodwill has an economic value, but this value is difficult to measure. Moreover, the goodwill may be martial or nonmarital property. If the value comes from the individual’s name (Brenda’s Beauty Shop), the goodwill is usually nonmarital property. On the other hand, if the value comes from the business name (Burger King), the goodwill is generally marital property.
Depending on the type of business, there are several different approaches. Some of the more common methods include:
- Market Approach: Similar to real estate, a professional appraiser looks for similar sales in the area. This method works well for mid-sized businesses in large industries, like restaurants and car dealerships. But with regard to closely-held micro-businesses, like a freelance writing business, this approach may not work.
- Asset Approach: This method is simple and objective. The business value is the sum of its parts. This method does not work well if the business has intangible assets, or no assets at all.
- Income Approach: Another objective method involves calculating current and likely future income. But forecasts can be wrong, and many businesses have large and expensive physical assets, like construction vehicles.
Less commonly-used methods include complex models which involve market capitalization.
Reach Out to Experienced Lawyers
A small business may be the largest single asset in a divorce. For a free consultation with an experienced family law attorney in Port St. Lucie, contact Eighmie Law Firm, P.A. Convenient payment plans are available.