Understanding How Divorce Affects Business Partnerships in Orlando
Orlando is home to a thriving business community filled with professionals, entrepreneurs, and executives who have built successful companies. When a high net-worth divorce involves a business, the impact extends beyond the couple—it affects business partners, shareholders, and employees. These situations require strategic legal guidance to protect business interests while ensuring a fair divorce settlement.
I am Beryl Thompson-McClary, an Orlando high net-worth divorce Attorney, and I represent clients on both sides of this issue. Whether you are a business owner going through a divorce, a spouse seeking a fair share of a marital business, or a business partner concerned about the impact of a partner’s divorce on your company, I am here to help.
If you are dealing with a business-related divorce matter in Orange County, Florida, call me at 1-888-640-2999 to schedule a consultation. Protecting your financial interests requires proactive planning and legal guidance tailored to your unique situation.
How Business Ownership Affects Divorce Cases
When a divorce involves a business, the court must determine whether the business is marital property or non-marital property under Florida Statutes §61.075.
- Marital Property: If a business was started during the marriage or if marital funds contributed to its growth, it is typically considered marital property and subject to equitable distribution.
- Non-Marital Property: If the business was established before the marriage and no marital funds or spousal contributions increased its value, it may be considered separate property.
- Hybrid Business Ownership: If a business was started before the marriage but grew due to marital contributions, the court may determine that a portion of the business value is subject to division.
Understanding these distinctions is critical in determining how a business will be handled in divorce proceedings.
How Business Partners Are Affected in Divorce Cases
If You Are a Business Owner Going Through a Divorce
If you own a business and are going through a divorce, protecting your company’s stability is likely a top priority. Your spouse may have a claim to a share of the business, which can lead to complications, including:
- The need for a business valuation to determine its worth
- A potential buyout to compensate your spouse for their share
- Legal disputes over income and asset distribution
- Concerns from business partners about ownership changes
If You Are the Spouse of a Business Owner
If your spouse owns a business, you may be entitled to part of its value, depending on the circumstances. Factors that influence your claim include:
- Whether marital funds contributed to business growth
- Whether you played a role in business operations
- Whether business profits were used to support your household
A proper financial analysis can help determine the fair value of your share in the business.
If You Are a Business Partner Concerned About Divorce Impact
Business partners often worry about how a partner’s divorce will affect company operations. Issues that may arise include:
- Disruptions in company decision-making if a divorcing partner is distracted
- A spouse gaining an ownership interest if business shares are divided
- Financial strain if a partner must liquidate assets to pay a spouse
- Breach of partnership agreements if divorce settlements override business contracts
The best way to prevent these complications is to have legal protections in place before issues arise.
Legal Protections for Business Owners and Their Partners
Prenuptial and Postnuptial Agreements
A prenuptial agreement or postnuptial agreement can clarify how a business will be treated in a divorce. These agreements can:
- Specify that a business remains separate property
- Define how business value will be handled if marital contributions are made
- Protect business partners from disruption due to divorce
Buy-Sell Agreements and Partnership Contracts
A buy-sell agreement is a legally binding contract that outlines what happens to business shares if a partner divorces. This agreement can:
- Prevent a spouse from obtaining ownership in the business
- Require a partner to buy out the spouse’s interest
- Set valuation methods for determining fair market value
Business owners should review existing partnership agreements to ensure they include divorce-related provisions.
Business Valuation and Asset Division
When a business is part of a divorce, a business valuation is necessary to determine its worth. This process includes:
- Reviewing financial records, profit margins, and business assets
- Determining the company’s fair market value
- Evaluating whether a spouse is entitled to a percentage of the business value
Once the valuation is complete, options for asset division include:
- A buyout agreement, where one spouse compensates the other for their share
- Offsetting assets, where the business owner keeps the company in exchange for giving up other assets (e.g., real estate or investments)
- Co-ownership, where both spouses continue running the business together (this is rare but possible in amicable cases)
Florida Laws That Impact Business Division in Divorce
Several Florida statutes govern business ownership in divorce:
- Florida Statutes §61.075: This statute establishes the rules for equitable distribution of marital assets, including businesses.
- Florida Statutes §61.08: This statute governs alimony and how business income can affect spousal support.
- Florida Statutes §618.01-618.28: These laws regulate partnerships and business entities, which can influence how businesses are handled in divorce cases.
Understanding these laws is crucial to protecting your interests and avoiding unexpected financial consequences.
FAQs About Business Partners and Divorce in Florida
How does Florida’s equitable distribution law affect business division?
Florida follows equitable distribution, meaning the court divides assets fairly but not necessarily equally. If a business is considered marital property, its value may be split between spouses based on factors like financial contributions and business involvement.
What happens if my business partner gets divorced?
If your business partner is going through a divorce, their spouse may attempt to claim a portion of their ownership interest. A well-drafted partnership agreement or buy-sell agreement can prevent a spouse from becoming an unintended business owner.
Can a business be excluded from divorce proceedings?
If a business is considered separate property, meaning it was owned before the marriage and no marital funds contributed to its growth, it may be excluded. However, if the business increased in value due to marital efforts, a portion of that value may be subject to division.
How is a business valued in a Florida divorce?
A business valuation typically involves forensic accounting, financial records analysis, and market comparisons to determine the company’s fair market value. Courts may require a certified appraiser to provide an unbiased assessment.
Can my spouse force me to sell my business in a divorce?
If a business is a marital asset and a fair buyout agreement cannot be reached, the court may order its sale to divide proceeds equitably. However, other asset division strategies can prevent forced liquidation.
Contact Orlando Attorney Beryl Thompson-McClary at 1-888-640-2999 For A Consultation
Business-related divorce cases require skilled legal representation to protect financial interests and maintain business stability. Whether you are a business owner, the spouse of a business owner, or a business partner concerned about divorce implications, I can provide the guidance you need. Call 1-888-640-2999 today to schedule a consultation and discuss your options.
Beryl Thompson-McClary
Address: 390 N Orange Ave #2300, Orlando, FL 32801, United States
Hours: Open
Phone: 1-888-640-2999
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