How Divorce Impacts Virginia Small Business Owners
When parties get divorced, the assets and debts accumulated during the marriage must be divided. If a small business was opened during the marriage, it may be divisible, depending upon the circumstances of the case. Small business owners who have made their business their livelihood understand that it is a significant asset, and understandably, their business is one of their main concerns during their divorce. So how does getting divorced impact small business owners in Virginia? Experienced family law attorney Michelle Hopkins offers insight below.
If My Business Was Structured As A Separate Entity From Me, Would It Still Be Involved In My Divorce?
In cases wherein the parties agree on the division of marital assets, a small business may only be mentioned in a separation agreement to officially state that a spouse is waiving their interest therein.
When the respective parties’ salaries need to be used to determine aspects of a divorce such as child support, spousal support, or a percentage share of an expense such as negative equity in the sale of real property, each party must provide proof of income, such as a pay stub or tax return. For a small business owner, this may be as simple as providing pay stubs or a tax return.
However, when parties disagree, the business may become more involved.
If parties have no agreement and require the assistance of lawyers, and potentially the Court, to agree on a division of their marital assets and debts, the business owner may be required to provide additional internal documents to fulfill discovery requests. A discovery request is a formal request for documents and information issued through the Court that a party must respond to or they will face legal consequences. For example, if someone refused to provide pay stubs to determine child support, the opposing lawyer could submit discovery requests to obtain that information.
In some situations wherein someone works for a corporation that they have no ownership in, the discovery requests may still be issued for documentation to that corporation depending upon the circumstances of the case.
Is Interest In My Small Business Divisible?
A small business opened during the marriage, with marital funds, in both parties names, may be divisible depending upon the circumstances.
If a small business was opened before a marriage, with separate funds, in one party’s sole name, it would not likely be divisible under most circumstances. Documentation supporting these facts may be necessary to provide to opposing counsel to defend ownership interest.
What Do I Need To Do To Protect My Small Business During My Divorce?
There are a few things that small business owners may do to protect their business:
- Hire an experienced attorney. There is no better defense than strong, experienced, legal counsel such as Michelle Hopkins. With the knowledge she has accumulated from years of practicing law, plus owning her own small business, she is well equipped to protect your interests.
- Be organized. Having official pertinent documents organized and readily available goes a long way.
- Operate cleanly. Do your best not to comingle marital and separate business funds, such as having a separate bank account for all business related financial transactions.
- Respond to discovery. Should you receive discovery requests regarding your business, be sure to reply timely, as failure to reply may result in legal consequences.
How Can The Hopkins Law Firm Help Me?
As a small business owner, Michelle Hopkins appreciates the hard work that goes into opening and maintaining your own business. She is ready to help you protect what you worked for. Please do not hesitate to contact her office today at 571-248-2210 or info@mhopkinslaw.com to schedule a consultation. Michelle Hopkins and her legal team are waiting to help you!