When a couple decides to end their relationship, the equalization of net family property is a key issue to be determined, along with questions of child and/or spousal support and parenting plans. In order to accurately assess the financial position of each party, it is necessary to create a thorough overview of each spouse’s assets and liabilities, which can become a complicated proposition. When one or both parties runs their own business, this complicates matters even more, as the value of a business forms part of their assets. In order to ensure a fair equalization, it will be necessary to place an accurate value on the business, and then determine the best method for dividing the asset, if that is required. It is critical to ensure the valuation is accurate and unbiased, as this will affect not only the division of property but also other financial matters, such as support.

At Boulby Weinberg LLP, our family law lawyers are exceedingly experienced working with clients with complex business assets. We assist clients with business interests from small businesses to large corporate assets. We work with each client to determine an accurate valuation of their business and a fair distribution of the assets. For clients with inter-jurisdictional business interests, our partners, Sarah Boulby and Oren Weinberg are both Fellows of the International Academy of Family Lawyers and have considerable experience dealing with spouses’ assets across Canada and abroad.

How to Deal with a Jointly Owned Family Business in a Separation or Divorce

When a couple shares ownership of a business and decides to end their relationship, there are a few options for how to manage the division of the business. If the couple has decided that they are not in a position to continue running the business together, one spouse can buy out the other’s interest in the business, either all at once, or over a period of time. Alternatively, the couple might choose to sell the business and share the profits from the sale. Both of these options may require a fair and accurate valuation of the business in order to ensure each person maximizes their interests.

Financial Disclosure Required for Business Valuations

In order to provide a full valuation of a family business or practice, the following documents will need to be disclosed (note that some documents will not be applicable for all businesses):

• All business-related tax returns and Notices of Assessment for the past several years
• Articles of Incorporation, if applicable
• Shareholder agreement, if applicable
• Any financing or loan documentation related to the business
• A list of assets of the business, including equipment and real property
• Any other financial documents, including forecasts, financial statements, payroll, and liabilities
• All documentation relating to insurance policies held by the business, or listing the business as a beneficiary

Considerations in a Comprehensive Business Valuation

Placing a dollar amount on the financial worth of a business involves much more than simply subtracting the debts of a business from the assets. There are many nuances to consider, and the process can become quite complex. For example, some or all of the following may be considered, depending on the nature of the business itself:

• Market conditions
• Tangible assets, such as equipment and property
• Intangible assets, such as intellectual property and goodwill
• The existence of other partners, owners or shareholders
• Future earning potential

For Experienced Guidance Through the Division of Your Family Business, Contact Boulby Weinberg LLP

Ending a relationship and a business partnership can be an extremely stressful and trying experience. It is vital to retain the services of a law firm with a full appreciation of the complexities of each and the lawyers at Boulby Weinberg LLP can help. We will ensure you receive a full and fair assessment of your business’s value, in order to determine an appropriate equalization of the asset.

To arrange a consultation with a reputable and empathetic lawyer at Boulby Weinberg LLP, please complete our confidential online questionnaire, which will provide you with valuable preliminary information tailored to your situation. A representative from our firm will contact you within one business day to discuss your matter further and arrange an initial meeting. To contact our firm without completing the questionnaire, please reach out to us online, or call us at 647-494-0113 ext. 102.