It’s really going to be based upon a case-by-case basis. However, when both spouses co-own, and not necessarily own, but both work in the business, each spouse is going to have an intricate knowledge of the business – although they may not have the same knowledge. For example, one spouse may actually work the business and the other spouse may actually be in the office. The spouse that’s working in the office may have more of the financial knowledge than the spouse who could be out in the field working, such as a landscaper. If one spouse manages the books for the landscaping company, that spouse may have more knowledge as to what the true financial picture is, as opposed to the other spouse who is managing crews and determining bids for obtaining new landscaping clients.
It really depends upon what are the roles that each spouse has. How will it be divided upon divorce? It depends what state you’re in as well as how long the business has been owned. Is it a true 50/50? That depends; it depends upon how long both of the spouses have been working in the business. It also depends upon what is the true ownership interest in this business. There’s one spouse listed as the president of the company but never steps foot in the company, if there is even a physical business. If it’s simply a business that’s on paper and has never been used for anything, but the spouse is listed as a vice-president for example, that depends upon what the business is and what each spouse’s role within has been.
Alison C. Leslie, Esq. practices family law exclusively in her Morristown, NJ offices, where she offers her clients the individualized attention of a solo practitioner with the experience of a larger firm.
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