# LLC bussines



## Janette (3 mo ago)

I am separated since March 2022, married 17 years. We do have LLC bussines that was created about 4 years ago. I work for state agency I dont make a good money , and I am entitled to the bussines, but, the apprasiel fo bussines cost $5000 , plus I will probbaly need lawyer. What I should do if i dont have money for appraisel and no money for lawyer.


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## DudeInProgress (Jun 10, 2019)

Janette said:


> I am separated since March 2022, married 17 years. We do have LLC bussines that was created about 4 years ago. I work for state agency I dont make a good money , and I am entitled to the bussines, but, the apprasiel fo bussines cost $5000 , plus I will probbaly need lawyer. What I should do if i dont have money for appraisel and no money for lawyer.


If this business isn’t even providing you enough income / cash flow where you can’t afford a lawyer or appraisal, you might want to reconsider whether it’s really worth fighting for in the first place.


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## Janette (3 mo ago)

DudeInProgress said:


> If this business isn’t even providing you enough income / cash flow where you can’t afford a lawyer or appraisal, you might want to reconsider whether it’s really worth fighting for in the first place.


It does, but I have no access to bussines account, never had access to any of my husband bank account. He dont want to appaise the bussines, he dont want to give me anything. So i have to pay for it if I want something from bussines I am assume


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## DudeInProgress (Jun 10, 2019)

Janette said:


> It does, but I have no access to bussines account, never had access to any of my husband bank account. He dont want to appaise the bussines, he dont want to give me anything. So i have to pay for it if I want something from bussines I am assume


Well, if you’re getting divorced, you need a lawyer anyway.

You need to figure it out a way to secure a decent lawyer for the divorce process, which will include discovery, appraisal and classification of assets (including LLCs ) to be distributed in the divorce settlement.

You need a lawyer, and there’s no way around that.


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## Janette (3 mo ago)

DudeInProgress said:


> Well, if you’re getting divorced, you need a lawyer anyway.
> 
> You need to figure it out a way to secure a decent lawyer for the divorce process, which will include discovery, appraisal and classification of assets (including LLCs ) to be distributed in the divorce settlement.
> 
> You need a lawyer, and there’s no way around that.


Thank you, I just wonder what people do if they cant' afford one


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## re16 (Oct 9, 2012)

What percent owner of the LLC are you?


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## Janette (3 mo ago)

I dont know? We married 17 years and bussines was created like 4 years ago, so I am entitle for half I think


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## DudeInProgress (Jun 10, 2019)

Janette said:


> Thank you, I just wonder what people do if they cant' afford one


They get screwed. You do not want to attempt a divorce without a (your own) lawyer.

Where are you in the process, if there’s no lawyer yet?
When you say separated, has one of you filed for divorce yet? 
Or are you just “separated” with the intent to divorce, or without a definitive path at all?
Who initiated this “separation“ ?


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## Janette (3 mo ago)

I did filed for divorce, I dont have to pay divorce fee , since I dont make enough money, we already had early resolution conference with mediator and at end of the November we should have resolution managment conference ( with judge) and i dont have attorney , he also doesnt have one yet, not sure if he will...Not sure how the bussines split without lawyer , how court solve it without lawyer


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## DudeInProgress (Jun 10, 2019)

Janette said:


> I did filed for divorce, I dont have to pay divorce fee , since I dont make enough money, we already had early resolution conference with mediator and at end of the November we should have resolution managment conference ( with judge) and i dont have attorney , he also doesnt have one yet, not sure if he will...Not sure how the bussines split without lawyer , how court solve it without lawyer


OK. Why did you file for divorce? 
And is your husband fully on board with this course of action?
The dynamics around the divorce (and precipitating it) are generally very relevant to how it plays out.


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## EleGirl (Dec 3, 2011)

What type of business is this?


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## Janette (3 mo ago)

why? we just didnt have a good life together, not sure whats "fully on board with this course of action" mean. Its pretty simple, we both want to divorce, but he dont want to give me alimony or anyting beside half of the house...


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## Janette (3 mo ago)

construction bussines


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## 342693 (Mar 2, 2020)

You can check with the Sec of State where you live to determine if you are listed as an owner. Should be able to look that up online depending on the state.

You will most likely have to go through the equitable distribution phase for your divorce. That’s where property and money is divided. Your husband cannot simply hid ownership during discovery unless he wants to go to jail.


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## Janette (3 mo ago)

SCDad01 said:


> You can check with the Sec of State where you live to determine if you are listed as an owner. Should be able to look that up online depending on the state.


Well, it doesnt matter who is the owner, I know I am entitle since we were married long time


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## DudeInProgress (Jun 10, 2019)

Janette said:


> why? we just didnt have a good life together, not sure whats "fully on board with this course of action" mean. Its pretty simple, we both want to divorce, but he dont want to give me alimony or anyting beside half of the house...


Which is why you need a lawyer.

Is there another man/woman involved on either end? That can certainly play into the divorce dynamics. 
If he has another woman, he might (though not necessarily) be willing to push through the process with less fight because of guilt or expediency.
If there’s another man involved, he’s likely going to fight like hell (and understandably so) to limit what you get.


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## DudeInProgress (Jun 10, 2019)

Janette said:


> Well, it doesnt matter who is the owner, I know I am entitle since we were married long time


That should be correct, his portion of the LLC would generally be considered a marital asset, unless mutually stipulated otherwise.


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## RebuildingMe (Aug 18, 2019)

It may be tougher for you. Construction businesses generally involve a lot of cash dealings. If he knew this divorce was coming, the actual amount the business shows may be a lot less. Start with your joint tax filings for the last 4 years. That should give you an indication of what income the business was generating. Do you have an accountant? If so, start there.


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## re16 (Oct 9, 2012)

So I'm in the same boat as your husband, own a large construction business...

Here is the deal from my perspective....

Each year that has gone by, there is a K1 tax form, which is the business income that flows to your personal taxes.... I think it is full fair game to go after funds that have been earned via a K1.

But in terms going after appraisal value, here is a scenario...

Lets say the business appraised for 5 million. If he is sole owner, technically, you are entitled to half that value... but if he writes a check out of the business for 2.5 million, that business is over and done, and then is not making any money going forward. He likely has no where near 50% of the business value in operating cash. If that happens, he is not ever starting another business, because of the reputational damage that would occur.

Otherwise, he would need to sell it, and you both take your shares, like selling a house, only issue is, no one is going to buy it.... that is just not how construction businesses work.

If you want to cripple his ability to pay alimony, child support, or anything else over the long term, you have the ability to do that and mess up your own finances in the process.

What would be better to do is to look at the business "retained earnings" and take half of that, that is essentially operating capital that hasn't been distributed to him yet, it would sting, but would not end his ability to operate and pay you over the long run...

Unless he was smart enough to create a buy / sell agreement, which essentially stipulates what happens in this scenario.

I know of quite a few businesses that folded due to a divorce and the wife going after 50% of appraisal value.. if you want to crush him and any potential future earnings, you essentially have the ability to do that....


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## Janette (3 mo ago)

DudeInProgress said:


> Which is why you need a lawyer.
> 
> Is there another man/woman involved on either end? That can certainly play into the divorce dynamics.
> If he has another woman, he might (though not necessarily) be willing to push through the process with less fight because of guilt or expediency.
> If there’s another man involved, he’s likely going to fight like hell (and understandably so) to limit what you get.


I am sure about that. We didnt end up our marriage becouse someone find someone. He was very greedy and I was his cook and cleaning lady, slave. Thats why I decide how I decide


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## Janette (3 mo ago)

I know he c


RebuildingMe said:


> It may be tougher for you. Construction businesses generally involve a lot of cash dealings. If he knew this divorce was coming, the actual amount the business shows may be a lot less. Start with your joint tax filings for the last 4 years. That should give you an indication of what income the business was generating. Do you have an accountant? If so, start there.


I am sure he claim much lesser income that he really made.


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## re16 (Oct 9, 2012)

Janette said:


> I know he c
> 
> I am sure he claim much lesser income that he really made.


Unless people pay him in cash, a forensic audit of the books along with a reconciliation will show exactly where the business stands financially, regardless of how much he claims on taxes. There are a lot of ways to legally defer taxable income in construction as well, so the actual audited books is likely the only way to figure out how much money is really there.


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## Janette (3 mo ago)

re16 said:


> So I'm in the same boat as your husband, own a large construction business...
> 
> Here is the deal from my perspective....
> 
> ...


 understand where you coming from. I worked for that bussines very hard, on beginning the bussines was slow, I work hard construction work my self (painting, demolation, grouting tiles etc), I advertise the bussines and looking for jobs. Its disqust me that he think I am not entitled after my hard work to anything from the bussines. He is greedy and he always was greedy and selfish. We have no kids , he didnt pay me anything, I dont care at this point about his future. Or his bussines


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## Janette (3 mo ago)

EleGirl said:


> What type of business is this?


Construction


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## re16 (Oct 9, 2012)

Janette said:


> understand where you coming from. I worked for that bussines very hard, on beginning the bussines was slow, I work hard construction work my self (painting, demolation, grouting tiles etc), I advertise the bussines and looking for jobs. Its disqust me that he think I am not entitled after my hard work to anything from the bussines. He is greedy and he always was greedy and selfish. We have no kids , he didnt pay me anything, I dont care at this point about his future. Or his bussines


Well if you were part of creating the business, that is a different story. 

Either way, you do have the ability to really take him down, if that is what you choose to do. Any attorney will be able to do that. The process would be appraisal, then judge will assign 50% of the value to you in the divorce settlement. Most construction appraisals are 5x the annual average net income, averaged over the past 3 years.

His ownership of the LLC is community property to the marriage, unless you signed a buy / sell agreement stating otherwise.


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## happyhusband0005 (May 4, 2018)

Janette said:


> Thank you, I just wonder what people do if they cant' afford one


I know of a few divorces that the husband had to pay for his and his wife's attorney. You should be able to find a lawyer who will give you a free consultation to start and see what they can do.


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## Young at Heart (Jan 6, 2015)

Janette said:


> Well, it doesnt matter who is the owner, I know I am entitle since we were married long time


More importantly, you might want to check if you are an owner of a Women Owned business. In the construction industry, often husbands will incorporate with their wives as 50 to 51% ownership so they can claim WBE (Women Business Enterprise) status and qualify for priority setbacks during bidding.

Also his not wanting to tell you want the business is worth is meaningless. In a community property state, you are right that as a wife, you are a part owner of the firm. In fact if it is a 4-yr old LLC firm, the past 4-years of your personal federal tax filings probably should include any profits from the business. At mediation hearing making sure that the judge knows it exists and that you want your fair share of the assets or net worth of the LLC will be an important point to bring up.

Even if he doesn't bring the data, asking the judge to have him produce it and allow for an adjustment in his final decision once you have the data is a way to proceed.

Good luck.


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## Young at Heart (Jan 6, 2015)

Janette said:


> I know he c
> 
> I am sure he claim much lesser income that he really made.


 A lot of states have finders fees where people who do cash transactions to avoid state taxes can receive a percentage of the collected taxes if they can provide hard evidence. You need to be careful that if you are a part owner or you and your H filed joint tax returns that you may be partially liable for those past taxes. This is a two edged sword.

Again, having a smart attorney is helpful in presenting those kinds of options and arguing for your rights or at least threatening things to improve a settlement that is proposed to a judge.


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## Janette (3 mo ago)

Young at Heart said:


> More importantly, you might want to check if you are an owner of a Women Owned business. In the construction industry, often husbands will incorporate with their wives as 50 to 51% ownership so they can claim WBE (Women Business Enterprise) status and qualify for priority setbacks during bidding.
> 
> Also his not wanting to tell you want the business is worth is meaningless. In a community property state, you are right that as a wife, you are a part owner of the firm. In fact if it is a 4-yr old LLC firm, the past 4-years of your personal federal tax filings probably should include any profits from the business. At mediation hearing making sure that the judge knows it exists and that you want your fair share of the assets or net worth of the LLC will be an important point to bring up.
> 
> ...


Thank you so much


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## Janette (3 mo ago)

re16 said:


> Well if you were part of creating the business, that is a different story.
> 
> Either way, you do have the ability to really take him down, if that is what you choose to do. Any attorney will be able to do that. The process would be appraisal, then judge will assign 50% of the value to you in the divorce settlement. Most construction appraisals are 5x the annual average net income, averaged over the past 3 years.
> 
> His ownership of the LLC is community property to the marriage, unless you signed a buy / sell agreement stating otherwise.





re16 said:


> Well if you were part of creating the business, that is a different story.
> 
> Either way, you do have the ability to really take him down, if that is what you choose to do. Any attorney will be able to do that. The process would be appraisal, then judge will assign 50% of the value to you in the divorce settlement. Most construction appraisals are 5x the annual average net income, averaged over the past 3 years.
> 
> His ownership of the LLC is community property to the marriage, unless you signed a buy / sell agreement stating otherwise.


Thank you so much for important information


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## Young at Heart (Jan 6, 2015)

re16 said:


> Well if you were part of creating the business, that is a different story.
> 
> Either way, you do have the ability to really take him down, if that is what you choose to do. Any attorney will be able to do that. The process would be appraisal, then judge will assign 50% of the value to you in the divorce settlement. Most construction appraisals are 5x the annual average net income, averaged over the past 3 years.
> 
> His ownership of the LLC is community property to the marriage, unless you signed a buy / sell agreement stating otherwise.


Actually, in an informal mediation situation, you could represent what you feel is the value of the LLC based on past tax records and "industry standard" valuation techniques. And yes there are trade association based valuations for may types of construction businesses.

It will require you to know the volume of work, and get tax filings for the business, but since an LLC profits and losses are reported as part of your personal federal and state taxes, the basic data should be available.

Since you can't pay for or you don't want to pay for an appraisal you will have to do it yourself or get a family member or friend to help you. That means a lot of research and work on your part. You can't be lazy.

However, take a look at the following article to see how you can do your own appraisal to present at you mediation hearing. how to value a construction business (See article).

You just need to give the judge or mediator something that appears reasonable so they can assign a value to it.


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## Young at Heart (Jan 6, 2015)

Janette said:


> I did filed for divorce, I dont have to pay divorce fee , since I dont make enough money, we already had early resolution conference with mediator and at end of the November we should have resolution managment conference ( with judge) and i dont have attorney , he also doesnt have one yet, not sure if he will...Not sure how the bussines split without lawyer , how court solve it without lawyer





Janette said:


> why? we just didnt have a good life together, not sure whats "fully on board with this course of action" mean. Its pretty simple, we both want to divorce, but he dont want to give me alimony or anyting beside half of the house...





Janette said:


> construction bussines


Mediation assumes that both parties want a low hassle non-contested divorce degree to go before a judge. If you H refuses the concept of valuing the business and refuses to pay alimony, then you can't effectively have a non-contested divorce. 

The mediator can point that out to your H. 

You are free to do it yourself, but it is going to require you to do a lot of hard work to educate yourself on divorce laws, on how to value the community property, how to value the construction company. You are either going to have to put in the hours or hire someone so that you get a fair outcome. 

The mediator needs to be fair and represent the interests of both side to come to a fair and agreed upon settlement that will be presented to the judge. That means you need to provide the mediator with factual information that they can used in crafting the settlement. If you come up with a position that says these assets are worth this amount, because of X,Y and Z, then the mediator can ask your H to come up with an alternate valuation method before the mediator chooses a value (often somewhere in between) that the mediator will use for the settlement.

Good luck, by not wanting to pay an attorney and do this on the cheap, you are going to have to work really hard to get a fair agreement if your H isn't generous.

No one is going to save you from yourself. You can not "play the victim card" and expect someone to save you.


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## Janette (3 mo ago)

Young at Heart said:


> Actually, in an informal mediation situation, you could represent what you feel is the value of the LLC based on past tax records and "industry standard" valuation techniques. And yes there are trade association based valuations for may types of construction businesses.
> 
> It will require you to know the volume of work, and get tax filings for the business, but since an LLC profits and losses are reported as part of your personal federal and state taxes, the basic data should be available.
> 
> ...


Yeah that wont be easy for me, like I said i have no access to any bank accounts or anything , I did find the last job he work on (project) for him , so I know he is busy but not sure how much he make. Also we both from different country so amily cant help me.. But I will read the article and do whatever I can. For sure. Thank you so much for lots of imortant info.So at least I have an idea


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## Young at Heart (Jan 6, 2015)

Janette said:


> *I said i have no access to* any bank accounts or *anything* ,* I did find the last job he work on (project)* for him , so I know he is busy but not sure how much he make. Also we both from different country so amily cant help me.. But I will read the article and do whatever I can. For sure. Thank you so much for lots of imortant info.So at least I have an idea


Listen, you can just throw up your hands and give up or you can sit down and think. You have it within you. If you won't fight for yourself, then who should?

For example, you found out his last job or project. Almost all contractors have to be bonded. The company that holds their bond, knows the dollar amount of their projects that they cover with a bond. If you know his project, you should be able to find out who hired him. They can be a source of information.

Almost all states have a department of Labor Relations that collects money from companies based on the salaries of the employees the company pays. Almost all States have some form of business tax that is based on sales or net profits. Most states have public disclosure laws where you can request a government agency certain fact in their data bases. Knowing the name of the company, their contractor license number, etc. you can ask for a public disclosure on financial data of the company.

Perhaps more importantly, again, is that an LLC's income, expenses, etc. is treated like that of a partnership and is recorded on your federal IRS tax return. If you signed a joint tax return, you should be able to get a copy. If your H won't give you a copy of a tax return ask the mediating attorney for your H's LLC for the past 5 (yes you said the LLC was created 4 years ago, but ask for 5years) years of tax returns so you can valuate the LLC. Just because you H says no, doesn't mean you have to accept "no." Ask the person mediating and explain why you need data that your H is withholding so you can propose a fair settlement.


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