Legal Question in Business Law in Iowa

Spouses and S Corps

My spouse wants to take over a company with 2 others. They plan to turn it into and S corp. Because of other circumstances I said no, but he is going ahead on his own. He has also stated that documents will be signed to elimate spousal rights to any part of the business. Can he legally keep me ''out'' of this without my signature, or does law still apply for marriage and 50/50?


Asked on 7/18/06, 4:29 pm

1 Answer from Attorneys
Robert Luedeman solo practitioner

Re: Spouses and S Corps

If you're still married whatever he acquires in the way of property (which would include part of a business) is part of the marital estate and subject to equitable distribution if you ever decide to divorce.

So, although you may not have any say so in the business or be shown as a part owner of record there is an interest.

Now. It is often done to make people personally liable on any debts an S corp incurs. If he incurs personal liability for any notes the company signs, you could get stuck with them if the company failed.

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Answered on 7/18/06, 4:57 pm


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