If you and your estranged spouse started a company together during your marriage, you likely have a lot of questions about what is going to happen to the business. In the context of Florida law, the business is 100% marital property, meaning it’s subject to equitable distribution. While that usually means a couple’s assets will be divided in half, the subject gets a bit stickier with a co-owned business, especially if you can no longer stand the sight of the co-owner, let alone working alongside them – your soon-to-be ex. The answer of who gets which part of the business isn’t cut and dry, either. That’s because there are a bunch of other considerations of “who gets what” in the divorce, and whether getting the income or revenues of the company will offset the assets you’re entitled to.
I’m a Businessowner Getting a Divorce. What Should I Do?
It’s imperative to keep good accounting books, and to give that information over to anyone who will eventually value your business. Valuation may be conducted in a number of ways, either through a private accountant, a business valuation expert, a business broker, and an actual offer of purchase from a willing buyer. What you should not do when you and your spouse are parting ways and one or both of you wish to sell the company is radically alter the corporate structure, turn away new work, shut down referral sources you previously had, layoff staff, change executive level staff, and so on. By doing so, you raise a big red flag to valuation experts.
If you are operating a joint business with your spouse, it’s unlikely the court will say you can both go back and keep working together. In most cases, this is just unrealistic and a recipe for disaster. You can likely expect that one of you will keep the company and operate it, while the other’s share of the company is going to be bought out. The big issue to ensure everything is in your best interest is to acquire the right legal representation. Even if you have a business lawyer you’ve worked with in the past to navigate you through corporate issues, it’s also crucial to have a divorce lawyer working with you. You may also want to involve your corporate accountant or a tax accountant.
I Have a Non-Marital Business, What Do I Do?
If you have a business you started before the marriage, circumstances are different. If one spouse argues (s)he put a lot of labor and energy into improving the value of the company, you run into a thorny issue. If you had a valuation of the company before your marriage for the purposes of getting a prenuptial agreement, this is excellent news, because you can easily compare and contrast the two values. However, if you do not have a prenup (most don’t), it’s not an absolute loss. You can get your business valuations backdated if you have kept good records. If you have business partners in your company, it’s important they are on board and know what’s coming down the pike, so they can protect themselves in the event you sell the company or change the corporate structure as a result of the divorce.
Family First Legal Group is your one—stop shop if you need help with your divorce concerns in Southwest Florida, even if you have a marital company or a non-marital company. If you need any help with your dispute involving a marital business, make sure you engage Family First Legal Group to help you. Simply call us at (239) 319-4441 to arrange your initial consultation with our legal team.