ownershipof new business

What is the name of your state? California

if I filw for a divorceon say Jan 15,2003 and then go into business for myself and form a new corporation or llc on jan 16,2003
would the stock I then hold under my name in the coropration be considered separate property that I can keep formyself and not have to share with my spouse,or doI have ot wait until the divorce is final foirthisa tobe possible?

[I AM ALWAYS LIABLE]

Originally posted by rightway
What is the name of your state? California

if I filw for a divorceon say Jan 15,2003 and then go into business for myself and form a new corporation or llc on jan 16,2003
would the stock I then hold under my name in the coropration be considered separate property that I can keep formyself and not have to share with my spouse,or doI have ot wait until the divorce is final foirthisa tobe possible?

My response:

Until a "final decree of dissolution" is in your hands, and signed by a judge, you'd still be married.

Also, you never mentioned the genesis of the money you'll be using; e.g., is the money a gift from some other source, or is it community property funds?

Lastly, you need to know that upon filing a divorce in California, an "automatic" Restraining Order goes into effect immediately (you can read it on the Summons, on both sides). A mutual restraining order effective upon service of summons in a dissolution, nullity or legal separation proceeding, and lasting until final judgment, dismissal or further court order, bars both parties from transferring, encumbering or otherwise disposing of any property without the other party's written consent or court order, except "in the usual course of business or for the necessities of life . . ."

So, it's very likely you won't be able to legally do what you want to do anyway due to the Restraining Order.

My suggestion would be for you to wait until the Dissolution is final.

IAAL

thks for the prompty reply

source of money would be from family member as a personal loan repayable to them at a fair rate of interest and they alsowoudl receive a share of the stockownership in the new company

[I AM ALWAYS LIABLE]

Originally posted by rightway
thks for the prompty reply

source of money would be from family member as a personal loan repayable to them at a fair rate of interest and they alsowoudl receive a share of the stockownership in the new company

My response:

Then, you definitely can't do what you want.

The loan becomes a community property debt; i.e., even though it's a loan to you, you AND your husband become jointly liable for the debt.

So, since by taking the loan you would be "endangering" the community property "estate" because the "community" would be liable to pay the loan back, thus diluting the assets of the community estate, the Restraining Order makes your loan unlawful.

If your husband were to bring this to the judge's attention during the "Restrained" period, the judge would invalidate the loan.

Like I said, wait until your dissolution is final.

IAAL

ok..this is clear..

after the dissolution,if the business is successful,can my spouse be entitled to any of my ownership inthe new entity??

or would they be entitled to get a share of any income I would recieve as income formthis buisness at a later time?

if I were to get a retirement plan benefit,would they be entitled to any of this?..

assuming the business is only started until after the final dissolution..

other scenario..what if my relative started the business now and is the only shareholder,,and I later purchased stock in the company either from them or from the treasury stiock with my own funds or arranged to borrow funds after the dissolution was final..same questions as listed above

thank you

[I AM ALWAYS LIABLE]

Originally posted by rightway
ok..this is clear..

after the dissolution,if the business is successful,can my spouse be entitled to any of my ownership inthe new entity??

or would they be entitled to get a share of any income I would recieve as income formthis buisness at a later time?

if I were to get a retirement plan benefit,would they be entitled to any of this?..

assuming the business is only started until after the final dissolution..

other scenario..what if my relative started the business now and is the only shareholder,,and I later purchased stock in the company either from them or from the treasury stiock with my own funds or arranged to borrow funds after the dissolution was final..same questions as listed above

thank you

My response:

Once the dissolution is final, the two of you would be separate - - having the right to do anything you want. He would have no more say in what you do, than I would. Of course, this all depends upon what, if anything, your Marital Settlement Agreement may say and control between the two of you in the future.

But, in the main, you should be free of "the ties that bind."

However, please understand me when I say, your last question to me indicates that you really do not understand the ramifications of what you're intending to do, or would like to do. If you did, you wouldn't have asked the questions.

So, before you do anything, I would also suggest that you have consultation with a local attorney about this entire matter. There are just too many variables to discuss on a bulletin board. You need to discuss specifics, and obtain specific advice.

Your attorney will help you to "map out" a plan and strategy of what must be done, done first, and when.

Good luck to you.

IAAL