LEGAL Q&A 46 JULY 2026 www.goodnewsfl.org Good News • South Florida Edition Any entrepreneur knows that a business’s worst enemy – but ironically, its greatest certainty – is uncertainty. And wisely seeks to structure partnership, shareholding and operating agreements to minimize it. In a world that is changing rapidly with the continued introduction of artificial intelligence and other technological innovations, combining the current economic outlook, businesses are facing exciting factors, and uncertainties, in the future. One business uncertainty that often gets overlooked, however, is the health and personal life of the owner him- or herself. What happens to the business – and to any business co-owners or partners – if an owner experiences a divorce, dementia or another incapacity, or actually dies? Who succeeds to ownership or partial ownership? Who takes control of decisionmaking? Let’s examine how to bring greater certainty to ensuring that you don’t end up with a surprise and potentially unwanted business partner. Bill Davell: What are some specific ways uncertainty can come to control a business? Henny Shomar: Some of the scenarios include: • A business partner gets divorced or married, with the ex- or new spouse receiving an interest in the business, • A couple who are business partners in an enterprise later divorce, • A business partner dies or becomes mentally incapacitated, with his spouse, heirs, or guardian assuming his ownership in or control of the business. BD: What are some of the actions my business can take to forestall these uncertainties? HS: Actions you should consider, include the following: • Pre- and post-nuptial agreements can establish how much — if any — of a business a spouse will receive in the event a divorce gives rise to disputed assets. These agreements can not only protect an owner of a business in which his or her spouse had no involvement yet claims an interest upon divorce, but also both members of a couple who own a business together. Equally important, any co-owner could use a pre-or post-nup to protect his or her business partners’ interests. • Governing or operating documents can be formulated or amended to delineate or instruct who besides the initial owners can own or buy shares. • Buy-sell provisions can be established to prevent the transfer of shares without the approval of the other owners. A buy-sell provision can also be formulated to establish ex-spouses or incapacitated owners as impermissible transferees and give co-owners the right to purchase their existing or putative interests. In addition, such agreements can require that a divorcing spouse automatically convert his stock or equity interest to a non-voting interest upon transfer. • Non-compete agreements inserted into the operating agreement can prevent widows/ widowers or ex-spouses receiving stock transferred by death or a divorce proceeding from competing with the business. • Transfer of decision-making authority. Provisions can also delineate that if a partner dies or is incapacitated, his or her decision-making authority, either overall or in specific areas, will automatically revert to an individual designated by the company, rather than to a spouse, beneficiary, guardian, or a court-appointed party. The business or its partners should in fact be proactive and designate specific individuals or officers by title to whom such decisions revert and update those designations when there is a change in ownership or management. BD: What if a business’ operating documents are already in place, or a married owner of partner does not have a pre-nup, and either co-owners or the spouse affected by a post-nup objects? HS: Obviously changes to existing arrangements can be a source of tension and misinterpreted as distrust on the part of the person proposing changes. As businesses innovate and shift gears in strategy in a rapidly changing world, outlooks and goals of businesses, and their perspective partners/investors, can change just as rapidly. Such tensions are one reason to bring in an experienced attorney, who can present such changes not as the idea of one party but as protection for the business. Attorneys are not only skilled in shepherding such negotiations but also in ensuring the right protections are chosen and are formalized in a way that both reflects the intentions of the parties and makes uncertainty at least somewhat less certain for its owners. Leveraging experience from addressing situations in other scenarios in the past, attorneys are an excellent advisory tool for businesses in addressing not only issues that are present, but also ones that could occur in the future so owners can make informed decisions. The attorneys of Tripp Scott’s Entrepreneurial Business Practice understand the unique business challenges faced by companies during all phases of growth and have provided counsel to businesses at all stages of development, including appropriate formation structures. Learn more at https://www.trippscott.com/entrepreneurial-business, by calling 954-525-7500 or by using our contact page at https://www.trippscott.com/contact-us. If you have any topics you think may be of interest to our readers, we encourage you to email us at [email protected]. Avoiding a Surprise – and Potentially Unwanted – Business Partner William “Bill” C. Davell Esq. The Good News provides a monthly column with important content having to do with topics from the legal community. This month Bill Davell, director, speaks with Henny Shomar, a partner at Tripp Scott Law Firm
RkJQdWJsaXNoZXIy MjE2MjU=