Divorce can be complicated for Florida residents, especially if the divorcing parties are co-owners of a business. Although some divorcing couples may want to retain ownership and continue to run businesses together after the divorce is final, many couples choose to transfer ownership to just one spouse.
Transferring business ownership during divorce differs from allocating personal assets. For example, parties who relinquish their shares of a business may also want to make sure that they will not be subject to any current or future claims against the business; therefore, they can walk away with a clean separation.
Sometimes, one party may not be able to buy out the other because of liquidity issues. In such cases, spouses could agree to remain co-owners of the company. However, mutually agreed-upon stipulations may govern their business relationship. Special guidelines can determine how much autonomy one party can have over the other as well as when the complete transfer of ownership can occur.
Other couples may decide to continue to own and run a business after a divorce because they believe they can retain a good professional relationship, they may love what they do or they may be in a burgeoning industry with anticipation of significant profits. However, an attorney might recommend protection in the form of a buy-sell agreement to protect the parties’ interests. A buy-sell agreement could ensure that in case one party chooses to buy out the other in the future, the transaction occurs during a mutually agreed-upon time after the proper interest and valuation is determined.
The likelihood that divorcing couples may have disagreements concerning co-owned businesses is significant. Those considering divorce may benefit from understanding the law and the manner in which it applies to them. An experienced family law attorney may help determine an outcome that benefits all parties.