Chamber of Commerce & Divorce
A joint business is probably the biggest asset of a married couple. Dividing it during a divorce can be a real challenge because a company that has been built over the years has both material and psychological value for its founders.
Spouses who own a company in Florida, regardless of its activity, should know how to divide the business as safely and smartly as possible.
How Florida Divides Marital Property
According to Florida Statute (61.075), marital property includes all the assets purchased or otherwise acquired by the couple during the marriage, regardless of whose name is listed as an owner.
For example, if a husband buys a restaurant during the marriage, this business will still be marital property. It doesn’t matter whether the husband bought it with money from his paycheck and is registered as the owner. A restaurant or chain of restaurants will still be treated as marital property.
Suppose the husband bought this restaurant before the marriage, but its value increased during his time with his wife, or they opened several more restaurants. Then, the difference between the original and present business value will also be marital property.
Florida supports the principle of equitable distribution. It means that the property that is defined as marital will be divided equitably or fairly. However, it is crucial to understand that equitably does not always mean a 50/50 split.
When deciding how to divide a joint business, the judge will consider the same factors as when dividing any other marital property, including:
- Spouse’s debts, assets, income, and earning potential;
- Marriage duration;
- The number of minor children in the marriage;
- Each spouse’s contribution to business development;
- Each spouse’s sacrifices, like the interruption of a career or education;
- Other relevant factors.
However, not all couples are ready to rely on the judge’s decision, especially in such a sensitive aspect of divorce as the division of a joint business. Many spouses try to resolve this issue out of court by making their divorce uncontested.
So what are the options to split the business if spouses don’t want to go to trial?
How Spouses Can Decide on Business Division Themselves
The first thing to consider is whether this business should be divided at all. If the spouses own it together, they can continue to manage it together. Or one of the spouses can do it, and the second will receive dividends.
However, for this scenario to be possible, partners must fully trust each other. If there are unresolved issues or claims between spouses, managing a business together can be psychologically complex.
Another option is to sell the business and split the profit. It’s a common approach to handling other marital property, such as the family home, cars, etc. But before making such a decision, you should be 100% sure you are ready to part with the company in which you invested your resources.
Also, one of the spouses can buy out the part of the business belonging to the second spouse.
The situation becomes more complicated if the spouses aren’t the only owners of the business. Although the options remain the same, there may be difficulties with other owners. For example, they may be dissatisfied if you decide to sell the business to another person.
However, you can always decide on this issue through negotiations. This freedom is another benefit of an uncontested divorce.
What Happens to Business Liabilities After Divorce
Companies often become members of various organizations. These can be charitable foundations, specialized industrial unions, chambers of commerce, etc. They do it to promote the business and its competitiveness and to develop.
Most often, participation in such organizations implies some financial obligations. For instance, joining the Florida Chamber of Commerce requires the company to make periodic contributions, giving the business access to the benefits of the Chamber of Commerce.
So, what about your business’s obligations to the organizations it’s a member of?
The short answer is that these obligations won’t go away. Your business’s obligations are your obligations. Therefore, you must pay the appropriate fees for the Chamber of Commerce membership both during the divorce and after it ends if you remain the owner.
You may also terminate your membership in the Chamber of Commerce if you feel it’s the right decision for your business or if you can’t bear such obligations.
Divorcing spouses running a business should ask themselves some very important questions:
- How do I want my divorce to go?
- What effect will the litigation have on me and my business?
- Do I realize that a contested court trial can ruin my company?
- Do I want to do my best to save my business and develop it further?
The answers to these questions will help you figure out which path to choose. But most importantly, if you want this path to be peaceful, your answers must match those of your spouse.