Self-Employed & Business Matters

 

Protect your business during divorce. We ensure fair treatment for business owners and the self-employed.

Family Law Services
Self-Employed & Business Matters

Serving Vancouver and Langley

When negotiating a settlement, factors such as self-employment and business ownership contribute to the complexity of a couple’s individual financial status. We can help make sure you’re treated fairly by taking all factors into consideration, including taxes.

Self-Employed & Business Matters

Income Determination

The starting point in determining a person’s income is Line 150 from their most recent income tax returns. For self-employed individuals, however, Line 150 often needs to be adjusted when calculating support payments so that the full financial benefit received is properly considered.

Business and Income Valuation

Because self-employment income can vary from year to year, professional valuations are often important. The same is true for business valuations. Relevant financial information may depend in part on self-reporting, and in some cases forensic accounting experts may be needed to assist.

Division of Business Interests

The value of a business is often an important issue in family law matters and may be subject to division between the parties. A number of strategies may be available to help reduce costly tax consequences or avoid unnecessary liquidation. Consulting a family lawyer early can help you better understand your options.

Frequently asked questions about Self-Employed & Business Matters
Self-Employed & Business Matters

Frequently Asked Questions

Your spouse is entitled to half the value of your business. Common exclusions include the value of assets that you brought into the relationship and any gifts or inheritances you received that remain traceable to the business.

You may keep the business provided you pay the equalization value of your spouse’s one-half interest. If you are unable to satisfy equalization payments with assets outside of the business, you may have to encumber, sell, or liquidate your business to satisfy the equalization payment. Other options available through out-of-court negotiations.

It is highly unlikely that your spouse will become a shareholder in your business if there are other feasible ways of dividing the value of your business, including reapportioning other assets.

Information about third-party shareholders and owners with respect to the business should be disclosed to the extent that there is sufficient information to accurately assess the value of your interest in the business.

In most situations, no. Forensic accounting is a costly and timely exercise that costs tens of thousands of dollars, although it may be warranted under highly suspicious circumstances.

The value of the business may be reduced by a minority shareholder discount provided the value of your interest in the business is affected by the fact that others have control of the business.

As the valuation is used to assist both parties in resolving the issue of business division, both parties share the cost.

Yes. However, the value of the business when you inherited it, or at the time of relationship commencement—whichever is later—is an exclusion to family property, which will be deducted from the value of the business now subject to division.

Get in Touch

Separation and divorce can involve added complexity when one or both spouses are self-employed, own a business, or have significant assets. At England & Lam Family Law, we help clients work through the financial issues that often arise in these matters, including business valuation, income analysis, support, and property division. Whether you’re dealing with a family business, corporate income, or a more complex financial picture, our team is here to help you move forward with confidence.

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