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Chicago Business Valuation Attorney Serving Cook County

Business owners see the value of their hard work every day. The reward of seeing a business you started or invested in expand and grow can be incredibly rewarding. Therefore, it can be especially difficult to know that the assets of the company you have led are subject to division during your divorce. You want to understand the full impact the divorce may have on your business and know that your interests will be protected. NextLevel Law, P.C. by Daniel R. Hernandez, Esq. can help business owners who are going through a divorce determine their business’s value and their options for the future.

Determining Whether A Business Is A Marital Asset In Illinois

In Illinois, any income, property or assets earned or acquired by either spouse while they were married are typically considered to be marital property. This means that during a divorce, they would be subject to division. This includes any business that was started or purchased during the duration of the marriage. It does not matter whether one of the spouses did not play an active role in the business.

There are situations when a business is not considered a marital asset and would not be subject to being divided during a divorce. If a company was started or acquired before the marriage, it could be considered the property of an individual spouse as long as only non-marital assets were used to invest in the business. This is also true in cases where a business was inherited or gifted to one of the spouses. However, if the other spouse helped contribute to the company’s growth through investments or by working there, they may be eligible for a share of the assets during a divorce. It is helpful to have detailed records to prove each spouse’s level of involvement in a business.

How To Value Your Business

When a business is involved in a divorce, both spouses can obtain a business valuation to understand the total assets of the business and provide a starting point for negotiations. There are various methods that financial experts use to value a company. The market-based approach looks at similar companies that have recently been sold to estimate the value of your business. The asset-based approach takes the total value of the business’ assets and subtracts any debts that the business owes to determine the business’ value. The income-based method will look at the company’s current cash flow and profits as well as future projections.

Addressing Your Business In Property Division Negotiations

If both spouses agree to sell the business, the proceeds would be equitably divided during the divorce process as part of the division of marital assets.

However, if you would like to keep control of a business after a divorce, there are certain options you can pursue. You can offer to buy out your spouse using any non-marital assets you may have or foregoing your claim to other marital assets, such as the marital home. You can offer to make regular spousal maintenance payments in exchange for retaining your share of the business. Finally, if your relationship is amicable, you could each continue to own a portion of the company.

Chicago Attorney For Business Valuation In Divorce Cases

The attorneys at NextLevel Law, P.C. by Daniel R. Hernandez, Esq. can work with you to understand the value of your business and how it will impact the division of assets in your divorce case. Whether you own your own business or were in a partnership with your spouse, call the firm’s office at 312-442-2225 or reach out online for an initial consultation. The firm offers flat fees for its services in order to provide affordable representation. The attorneys are proud to serve clients in Chicago and throughout Cook County and speak Spanish and English.