Tennessee’s divorce laws divide marital assets through an equitable distribution method based on fairness. If you started or acquired a business during your marriage, your soon-to-be ex-spouse has a right to receive his or her fair share of it.
Business ownership could become a priority, especially when considering your partners or shareholders. As noted by Business.com, a divorce may dilute your stake in a business if the court awards some of your stock or partnership interests to an ex-spouse.
What could an ex-spouse do as a business owner?
When your ex’s fair share affects your ownership rights in a business, you may have an option to negotiate a buyout of his or her portion. This could prevent your ex from becoming an owner with voting rights or decision-making abilities. A negotiated spousal buyout could alleviate some of the concerns you and other stakeholders might otherwise experience.
Some married couples have the ability to own and operate a business together. After a divorce, however, they could run into problems by continuing to work as team members. They may instead choose to sell a business and divide its proceeds fairly.
How may I prevent the loss of a business?
To maintain full ownership rights in your business, you could discuss other arrangements with your soon-to-be ex-spouse. He or she might prefer to stay living in your shared house. You may then, for example, agree to give up your share of homeownership. Rather than receiving a stake in a business, your ex may view owning the home as a fair property swap.
Divorcing Tennessee couples have a right to receive a fair portion of the income from businesses owned and operated during marriage. This does not mean, however, that you need to give up full ownership of your business if you could instead negotiate an alternative property division.