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Business asset/debt

Posted in Location, Ontario, Separation, Toronto Downtown Core by Questions on April 21, 2014

My soon to be ex owns a business under their name only. I worked for the business while we were married but never took a pay cheque. Am I 50% liable for the business debt now that we are separated? If so, am I also entitled to the profits should they sell the business to pay off the debt and come out ahead?
Thank you.

1 Expert Comment

  1. On April 23, 2014 at 9:24 am
    A Family Lawyer said:

    There are numerous issues to consider to resolve a closely held business ownership in a divorce. Assuming you and your ex will not continue to operate the business together, and that the business is going to be sold or otherwise. If the ex is going to continue operating the business, then a valuation is necessary, you may also want a valuation to ensure fair market value if it is sold. There are different methods to value a business, but usually it is fair market value. You would choose the appropriate expert business appraiser with the necessary credentials. The issues of the source of funds used to finance operations, and each of your contributions, financial and labour-related, should be explained to your expert appraiser so they have a complete picture. All of these issues must be determined by way of consultations with your expert appraiser and family law lawyer. If the business is incorporated, then the liability for the debts are with the company and any co-signers on those debts. If the business is not incorporated, then the debts are the responsibility of the persons who signed with the creditors to incur the debts, including any co-signers.

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