Opinion ID: 1781943
Heading Depth: 2
Heading Rank: 3

Heading: Business Interests and Partnerships

Text: Some jurisdictions consider partnerships, joint ventures, shares of stock in a closely-held corporation, or other business relationships with contractual underpinnings to be marital assets subject to equitable distribution. Because the majority adopts a definition of marital property which includes any and all assets accumulated or acquired during the course of the marriage, we can only assume that where it might be perceived that equitable circumstances so dictate, these interests might be deemed marital property. However, when dividing these assets, other jurisdictions have considered the ramifications of equitable distribution in harmony with other statutory provisions. For example, when valuing the assets of a partnership and determining the former wife's equitable interest therein, the Arkansas court turned to the Uniform Partnership Act, adopted in that jurisdiction as it has been in Mississippi, to render its decision. Riegler v. Riegler, 243 Ark. 113, 419 S.W.2d 311 (1967). See also Dag E. Ytreburg, Annotation, Evaluation of Interest in Law Firm or Medical Partnership for Purposes of Division of Property in Divorce Proceedings, 74 A.L.R.3d 621 (1976 and Supp. 1993). How are the assets of the business to be determined? Is goodwill taken into consideration? If funds are not available to buy out the spouse awarded an interest in a partnership, close corporation or other business, can the new partner or shareholder claim a voting stake in the enterprise? Conversely, when, for example, a judgment against a partnership exceeds its assets and insurance, must the spousal partner share the liability? In a family-owned close corporation, where the business is owned and operated by one spouse and the adult children, can the other spouse be awarded a substantial share of the business to the detriment of the children? Who shoulders the tax burden of any transfer of interests or liquidation of business assets to effect a distribution to a former spouse, the business or one of the divorcing parties? Without consideration of statutes governing other areas of the law, the division of business interests can greatly interfere with existing contracts and agreements.