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What Happens if an Owner of a Florida Business Gets Divorced Without a Buy-Sell Agreement?
Successful business owners are known to work long hour days with little or no time for vacation, which oftentimes leads to the erosion of familial relationships. It is not uncommon for a business owner to get divorced in Florida, and the marital dissolution laws in the state of Florida require an equitable, or fair, division of property between the spouses. And so, Florida is said to be an equitable distribution state (as opposed to a community property state).
Our Tampa business attorneys and Tampa contract lawyers understand that Florida divorce courts normally consider the difficulty in splitting or dividing an asset when determining the division of marital assets in the event of a divorce. A business started by a spouse during the course of a marriage is typically deemed to be a marital asset.
Practically speaking, when an owner of such a business owns the business with other shareholders, partners, members or owners who are not his/her spouse, the divorcing owner's spouse has the right to, and likely will, ask the court for half of the ownership interests in a business owned by the owner. Our Tampa business attorneys and Tampa contract lawyers indicate that while courts sometimes award the entire ownership interests to the spouse that operates the business (and gives the other spouse property, money or other assets to make the distribution equitable), it is not uncommon for a judge to simply order the business owner to transfer half (or some other portion) of his/her business interests in the corporation, limited liability company, partnership or other business entity to the spouse.
If this occurs, the divorcing owner's fellow shareholder, partner, member or other co-owner then are stuck with being partners with the divorcing owner's ex-spouse. To make matters worse, the ex-spouse now possesses all of the rights, titles and interests that a shareholder, partner, member or other co-owner has in the business, including minority shareholder type interests.
Our Tampa business attorneys and Tampa contract lawyers commonly prepare buy-sell agreements (as well as shareholder agreements, partnership agreements and operating agreements) for businesses in Tampa, Florida while taking into account a business owner's reluctance to become a co-owner, shareholder, co-managing member or partner with a co-owner's former spouse.
If you are in need of a Tampa business attorney, Tampa contract lawyer, Tampa lease lawyer or Tampa real estate attorney to review, negotiate or prepare your buy-sell agreement or contract, or to handle your business, real estate or commercial transaction, please feel free to contact us at any time.