St. Petersburg Treatment of Corporate Holdings Lawyer
All divorce cases have the potential to become complex, but when the spouses involved share a business together, certain issues become much more complicated. Couples who co-own a business together face much more challenging decisions, and those will have a higher financial impact during the divorce process. If you and your spouse own a business together and it is a limited liability company (LLC), a divorce could impact your business, too. Below, our St. Petersburg treatment of corporate holdings lawyer explains how.
The Different Types of LLCs
Owners of LLCs are considered members, and one LLC can have one or many owners. An LLC can shield the members from personal liability, but this does not always mean the business will not be affected by the divorce. Some of the most common types of LLCs involved in divorce cases are as follows:
Single member LLC: The most affordable and popular type of LLC, owners can still be held personally liable for company taxes, transactions, and debts.
General partnership: For LLCs with multiple members, a general partnership is the most preferred business formation. In this situation, all members are liable for company taxes, transactions, and debts.
Family limited partnership: Families sometimes form LLCs to protect their business interests and other property. This formation allows ownership to be transferred from one generation to another, while also holding certain tax protections.
Regardless of the type of LLC a spouse owns, or a couple owns together, the equitable distribution laws of the state may dictate its division in some capacity.
How are Corporate Holdings Treated in Divorce?
Under the equitable distribution laws of the state, all marital property is divided fairly, although not always equally, during the divorce process. Marital property includes all assets and liabilities obtained by one or both spouses during the marriage. Any property acquired prior to the marriage is considered separate property unless an agreement stipulates otherwise, or one spouse received an inheritance during the marriage.
Corporate holdings can be considered marital property depending on many factors. These include:
- When the LLC was formed
- If marital property was invested in the LLC
- How much each spouse contributed to the LLC
- Any agreements pertaining to the LLC
For example, an LLC formed before the marriage may be considered separate property. However, if the assets of the LLC were commingled with marital assets, the entire business could be considered marital property. If the profits of the business were used, for instance, to pay the mortgage on the marital home, that could mean the entire company, or at least the combined ownership of each party, is subject to property division.
Our Treatment of Corporate Holdings Lawyers in St. Petersburg Can Protect Your Business
Our experienced St. Petersburg corporate holdings lawyers at Greene & Greene can help you determine the value of your business, while also protecting your portion of rightful ownership in the event of divorce. Call us now at (727) 821-2900 or contact us online to schedule a consultation and to learn more about how we can help.