Beginning the divorce process often requires an accounting of what you and your spouse are worth monetarily. Real property, assets, and certain contributions to the relationship can all factor into how a court will divide things between divorcing spouses.
The process can also complicate an attempt to sell your business, especially if you are selling a medical or dental practice during divorce in Toronto. A divorce lawyer could explain what to expect and what you may need to do in order to sell a practice in the context of divorce.
Divorce proceedings consider the lives and livelihoods of divorcing spouses to determine how things should be split between them. In addition to allotting parenting time and decision-making responsibility for children, a divorce results in the division of marital property.
A business you own, such as a medical practice, counts as your property and a source of income, so the court governing your divorce will likely factor it into its decision. How much your practice is worth and estimations of its future earnings can influence if and how much you may pay to your spouse or vice versa, similar to valuing a piece of land or a financial account.
Timing can be a crucial part of how your Toronto medical or dental practice is valued for purposes of a divorce and a sale, because the court may take into account when you founded the practice (or when you joined a group practice) and how it has grown. Similarly, your spouse’s contributions to the practice, if any, can affect how a court will decide questions of equity when dividing property.
Selling a business has its own set of unique considerations, including tax treatment, the transfer of liabilities to new ownership, the assignment of commercial real estate, and the creation of restrictive covenants. Your practice will need to be valued to negotiate a purchase price, taking into account the rights of each holder of an ownership interest and the practice’s state of operations.
If you are involved in a divorce proceeding when your practice is approaching a sale, that valuation could be questioned if your spouse retains any rights to govern the practice or to receive profits. Shareholders in a company may be able to sell their interests to the company in the event of a sale or block a sale by voting against other owners with a high enough ownership percentage.
In addition, even if your spouse is not a physician or dentist, they could end up in the position of leading a medical or dental practice. Although Ontario does allow for some ownership of practices by non-professionals, this shift in ownership could go against the governing documents of your specific practice and complicate an upcoming sale.
Since the law considers your interest in the practice as marital property subject to division, selling the practice can also lead to your share of the proceeds being split with your spouse in lieu of dividing the unsold interest. Of course, that division of proceeds would only happen if the sale of your medical or dental practice is successful—a task with which a Toronto divorce lawyer could assist to keep the transaction moving smoothly alongside divorce proceedings.
Managing both the sale of your practice and divorce can present a challenge, but you do not have to navigate both processes alone. Instead, selling a medical or dental practice during divorce in Toronto could benefit from the attention and care of a lawyer as your advisor and agent.
The Riley Divorce & Family Law Firm could provide that assistance and a careful evaluation of your practice and marriage to guide you through your divorce. With several lawyers available 24 hours a day to meet your needs, contact our offices to set up a consultation.
Now you can have your Consultation with Paul Riley any time from the comfort of your own home. With video calls from Zoom, your Team at The Riley Divorce & Family Law Firm can meet with you virtually, and learn about your case. All you need is a smartphone, tablet, laptop, or desktop with a built-in camera and microphone.
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