Starting new business and divorce

[My Question]

What is the name of your state? CA

My husband and I are opening up a restaurant with one other partner. The other partner owns 50% and my husband and I own the other 50%. We have a lease with all 3 names on it with an opening date of 2-1-19. We did the first step in the corporation process but have not elected officers, assigned shares or made the resolution or bylaws yet. We also plan to file for divorce before the end of the year. If I decide not have any shares in my name or become an officer am I still entitled to half of my husband's 50%?

 

[Zigner]

Probably - you would be wise to consult with a local attorney.

EDIT: I've rethought this. If you start the new business AFTER you have filed for divorce, it will likely complicate things. You MUST talk to an attorney before moving any further along either on either matter.

Also, why would you start a business with the guy you're going to divorce?

 

[PayrollHRGuy]

Assuming that 50% is being paid for with marital funds.

But if you KNOW you are going to be going to divorce why not just split the shares at the start?

 

[quincy]

What is the name of your state? CA

My husband and I are opening up a restaurant with one other partner. The other partner owns 50% and my husband and I own the other 50%. We have a lease with all 3 names on it with an opening date of 2-1-19. We did the first step in the corporation process but have not elected officers, assigned shares or made the resolution or bylaws yet. We also plan to file for divorce before the end of the year. If I decide not have any shares in my name or become an officer am I still entitled to half of my husband's 50%?

It depends on what you agree to in the divorce. It might be you are better off letting your husband have the business in exchange for you getting another asset of equal value.

I agree with Zigner that you will want advice from your divorce lawyer.

 

[PayrollHRGuy]

The only problem with that is that the value of the startup is likely to be very low at the time of the divorce.

 

[quincy]

The only problem with that is that the value of the startup is likely to be very low at the time of the divorce.

Possibly. That is why a lawyer is important - to review all assets and to assess their current (and potential) values.

There will have to be negotiations between the two so there is an equitable distribution.

The end of the year is approaching rapidly so decisions made now should be made with the future divorce in mind.

 

[PayrollHRGuy]

Of course, this brings up another question. Why in the world would anyone start a new business with someone they are about to divorce.

 

[quincy]

Of course, this brings up another question. Why in the world would anyone start a new business with someone they are about to divorce.

That is a very good question.

"My Question" signed the lease for the restaurant facility already so she can be held responsible for that.

 

[Zigner]

That is a very good question.

I wish I would have thought to ask that...


(Just ribbing ya!)

 

[PayrollHRGuy]

I wish I would have thought to ask that...

I missed that in your post.

 

[quincy]

I wish I would have thought to ask that...


(Just ribbing ya!)

I noticed you asked it in your first post. It was worth PayrollHRGuy's repeating it because it was just that good a question.

Perhaps "My Question" does not know the best way to undo what already has been done. Here is where a divorce attorney can be helpful.

 

[My Question]

Probably - you would be wise to consult with a local attorney.

EDIT: I've rethought this. If you start the new business AFTER you have filed for divorce, it will likely complicate things. You MUST talk to an attorney before moving any further along either on either matter.

Also, why would you start a business with the guy you're going to divorce?

He is actually the one who started it with his partner and I had no choice in my name being on the lease since we are married. I figure since I'm on the lease and liable now I might as well be part owner.

 

[quincy]

He is actually the one who started it with his partner and I had no choice in my name being on the lease since we are married. I figure since I'm on the lease and liable now I might as well be part owner.

You had a choice. You did not have to sign a lease.

You should hire a divorce attorney now to protect yourself and your assets.

 

[LdiJ]

He is actually the one who started it with his partner and I had no choice in my name being on the lease since we are married. I figure since I'm on the lease and liable now I might as well be part owner.

You absolutely did not have to have your name on the lease. That was your choice entirely.

 

[quincy]

You absolutely did not have to have your name on the lease. That was your choice entirely.

It is getting OFF the lease now that could be a problem - or one of several problems - with this new business and the anticipated divorce.