If you and your spouse own a Florida business, it will undoubtedly become a major factor should the two of you ever decide to divorce. Florida is an equitable distribution state, meaning that you must divide all your marital assets and debts fairly and equitably.
When it comes time to divide your business, you generally have the following three options:
- Continued joint ownership
Each option has its advantages and disadvantages. Consequently, your choice depends on your particular situation.
Selling your business and dividing the proceeds represents a straightforward option if neither of you wishes to continue owning and operating the company. However, before you sell, you probably need to hire a professional business evaluator to determine not only your business’s value, but also the value of your respective shares, plus a reasonable selling price. This means up-front costs that could be substantial. Also, the strength of your area’s commercial real estate market will be a big factor in the sale time.
A buyout means that one of you buys out the other’s business share. Again, you will need to determine your business’s overall value plus the value of each spouse’s share. Then, assuming that you are the leaving spouse, your spouse generally can buy you out via one of the following methods:
- Give you non-business marital assets to offset your share of the business
- Obtain new business capital, such as by bringing in a new partner, with which to buy you out
- Secure a business loan to buy you out over a specified period
Continued joint ownership
Your divorce does not need to mean the end of your joint business ownership. If you and your spouse both believe that you can sufficiently separate your personal lives from your business lives, continued post-divorce joint ownership represents not only a viable option but the one least disruptive to your business. However, experts recommend that you and your spouse enter into a written partnership agreement that specifies not only which business duties and obligations each of you will have, but also the methodology by which a buyout can take place, if necessary, in the future.