You may think your marriage will last forever. But do you have the same faith in your business partner’s marriage? If your partner’s divorce gets ugly, it can cost your business money and cause the disclosure of confidential business information. At a minimum, if your partner owns thirty percent or more of the company, he or she will be required to provide the court with a financial affidavit and general statement of the company’s market value. Your company will be forced to turn over its tax returns and bank statements for the last three years as evidence of your partner’s income—but a court can require so much more.
Intrusion Into Your Business to Determine Income and Set Support
Florida courts worry that shareholder-spouses will stop their privately held companies from making distributions in order to reduce their income, and as a result, reduce their alimony or child support obligations. Shareholder-spouses must therefore prove that their companies are retaining money only for corporate purposes, and not to shield money from nonowner spouses. Ordinarily, an accuser has the burden of proving a wrongdoing. But in a divorce case, the shareholder-spouse has the burden and expense of proving that the company did nothing wrong. The Florida Supreme Court placed this unusual burden on shareholder-spouses in the Zold v. Zold case.
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