Separation and joint ownership of business

[backinthesaddle]

Does anyone have experience with separation and joint ownership of a business? Business owned jointly but one spouse works and the other doesn’t work. Probably for tax purposes it was beneficial. Non working spouse was a salaried employee. Now separated and living apart. One spouse still working for the business and the other now racking up personal debt on that business account. It is simply status quo when it comes to finances for the household. Everything is paid for. Now the spouse is going through every record on the business trying to claim it isn’t an expense To increase the annual revenue. How does one put a stop to this? Kind of like owning a store together and the one spouse keeps taking money out of the till for personal expenses with no accountability. How does this kind of business even get evaluated if the entire company falls solely on the labour of one person? Could one spouse get a separate account and simply make it transparent and show all income but try to keep a handle on the personal expenses? One expense is paying the lawyer fees with this account. Because of this, every day there is a call or email to the lawyer so the bill is high and at the moment it is a joint expense. Almost laughable.

 

[arabian]

is business incorporated?
Business filed corporate taxes, HST/GST, WCB returns annually?
Business expenses should be tracked separately. Spouse can go back many years and create set of revised company books if they were not previously kept. Tax returns can be amended to reflect lack of bookkeeping.

If one business partner (spouse) diverts income from other partner (spouse) then spouse who is cut off has a very good case to file for interim spousal support (and it can be quite hefty).

I'd recommend taking a breather and focus on how to approach things amicably if possible. Keep 3rd parties (g/f's & b/f's, and family members out of things). Or do nothing, continue to spar and watch all your money and home equity go to lawyers.

 

[Tayken]

is business incorporated?
Business filed corporate taxes, HST/GST, WCB returns annually?
Business expenses should be tracked separately. Spouse can go back many years and create set of revised company books if they were not previously kept. Tax returns can be amended to reflect lack of bookkeeping.

If one business partner (spouse) diverts income from other partner (spouse) then spouse who is cut off has a very good case to file for interim spousal support (and it can be quite hefty).

I'd recommend taking a breather and focus on how to approach things amicably if possible. Keep 3rd parties (g/f's & b/f's, and family members out of things). Or do nothing, continue to spar and watch all your money and home equity go to lawyers.

Hey! You must be bored. Good to see you posting!

 

[vahowus]

Separate the business bank account now. You don't need their consent, just tell the bank you're removing their access due to separation. Keep clean records of all revenue and expenses from that point forward. Pay legal fees from a personal account, not the business one, so it stops being a disputed "expense." For valuation, since the business's worth depends on your labour, whether it runs on memberships alongside individual sessions or some other revenue model, get a family-law-experienced business valuator involved. That's a real legal concept (personal vs enterprise goodwill), not something to hash out yourselves. Let your lawyer and an accountant handle the rest.