Introduction: When Business Ownership Becomes a Tool for Concealment
Divorce is a financial reckoning, and under Florida law, spouses are required to disclose all assets—regardless of how or where they are held. But when one spouse operates through shell companies or limited liability companies (LLCs), the discovery process becomes much more complicated. While businesses are often legitimate and necessary ventures, they are also a common vehicle for hiding, diverting, or undervaluing marital assets.
In high-net-worth and contested divorce cases, uncovering shell companies or LLCs used to shield assets is essential to a fair and equitable distribution. This is particularly true when the other spouse has substantial control over financial matters, operates businesses, or maintains opaque income streams. A Tampa divorce lawyer skilled in forensic investigation, financial tracing, and corporate discovery plays a central role in exposing these entities and bringing concealed wealth into the courtroom.
This article explores the tactics spouses use to hide assets through LLCs and shell companies, how a Tampa divorce lawyer can identify and investigate these entities, and what legal tools are available to ensure that no asset escapes equitable distribution.
What Are Shell Companies and How Are They Used in Divorce?
A shell company is a legal entity—typically an LLC or corporation—that has no significant independent operations or assets. It often exists on paper only. In legitimate business contexts, shell companies may serve useful purposes such as asset protection, tax planning, or privacy. In divorce, however, they are frequently used to:
- Park marital funds to keep them off financial affidavits
- Transfer income-generating property like rental units or accounts
- Obscure ownership of bank accounts, vehicles, real estate, or investments
- Undervalue businesses by transferring assets or liabilities
- Create artificial losses or expenses to reduce apparent net worth
Shell companies can be incorporated quickly, inexpensively, and anonymously in many states, including Florida. Spouses who are financially sophisticated often use these entities to complicate the discovery process or to shield assets from division.
A Tampa divorce lawyer must recognize when a shell company is being used as a financial smokescreen and respond with targeted legal strategy.
The Rise of LLCs as Asset Shields
Unlike corporations, LLCs require minimal formalities. Florida law allows for single-member LLCs with limited public disclosure, making them a popular choice for those looking to retain control while minimizing transparency.
LLCs may be used in divorce to:
- Hold title to property (e.g., real estate, vehicles, collectibles)
- Obscure income sources (e.g., consulting payments, online businesses)
- Pay personal expenses as business deductions
- Receive payments from employers or vendors intended for the spouse
- Avoid bank account discovery by routing funds through the LLC
Because LLCs are pass-through entities, income and expenses flow directly to the member, but only if they’re disclosed. If the other spouse fails to disclose membership in an LLC or misrepresents its activity, the court may never know unless aggressive discovery is conducted.
A Tampa divorce lawyer will examine all business interests—disclosed or suspected—using state records, tax returns, and forensic experts to follow the money trail.
Red Flags That Suggest a Shell Company or Hidden LLC
- Unexplained Business Expenses on Tax Returns
If a spouse reports Schedule C or K-1 income from unknown entities or large “business expenses,” further inquiry is warranted. - Drop in Reported Income with No Change in Lifestyle
A sudden decline in declared earnings while spending remains steady may signal income diversion through an LLC. - Loans or Payments Made to Unknown Entities
Transfers labeled as “vendor payments” or “loans” to unnamed businesses may be self-dealing. - Property Titled to an Entity, Not the Spouse
If assets such as real estate, cars, or boats are held in an LLC or obscure company, their ownership and value must be examined. - Undisclosed EINs or Business Bank Accounts
The absence of business bank accounts on financial affidavits is a red flag when the spouse owns or controls an LLC. - Unfamiliar Entity Names on Credit Reports or Mail
Corporate names on credit pulls or mail to the family residence may reveal undisclosed entities.
A Tampa divorce lawyer who identifies these red flags will use discovery to compel production and expose concealment strategies.
Discovery Tools for Uncovering Shell Companies and LLCs
A Tampa divorce lawyer has several legal mechanisms at their disposal to identify and investigate shell companies:
- Interrogatories and Requests for Production
Demand a list of all business entities owned, controlled, or affiliated with the spouse, along with:- Articles of organization or incorporation
- Operating agreements
- EIN documentation
- Tax returns and K-1s
- Bank statements for the business accounts
- Subpoenas to the Florida Department of State
Florida’s Division of Corporations (Sunbiz.org) provides public records on entity formation. Subpoenas may reveal:- Names of registered agents and managers
- Registered addresses
- Annual reports and amendment filings
- Subpoenas to Financial Institutions
Obtain bank statements, canceled checks, and wire transfers from banks where the business holds accounts. - Deposition of the Spouse
Question the spouse under oath about the nature, ownership, and financial activity of each entity. - Third-Party Depositions
Depose business partners, CPAs, vendors, or employees who may know the structure and function of the entity. - Forensic Accounting
A financial expert can trace funds in and out of entities, identify commingled funds, and quantify undisclosed income.
A Tampa divorce lawyer must ensure that discovery is broad, strategic, and supported by evidence to avoid stonewalling and delay.
Using Public Records and Open-Source Tools
Not all information needs to come through formal discovery. A Tampa divorce lawyer can use open-source tools to gather intelligence:
- Sunbiz.org: Lists all Florida business entities and their officers.
- Property Appraiser Websites: Search by LLC name to find real estate holdings.
- Clerk of Court Filings: Reveal lawsuits, liens, or contracts involving the business.
- UCC Filings: Identify security interests or pledged assets tied to the LLC.
- Federal Court Dockets (PACER): Uncover federal litigation involving the spouse’s entity.
- Social Media and Professional Profiles: LinkedIn, Facebook, or business websites may list entity affiliations.
Combining this information creates a roadmap for deeper investigation during discovery.
Tracing Assets Through LLCs: A Strategic Approach
Once a shell company or LLC is identified, a Tampa divorce lawyer must trace assets and income flowing through it. This involves:
- Evaluating Corporate Formalities
If the LLC fails to maintain separate books, records, or business accounts, it may be subject to “piercing the corporate veil.” - Reviewing Business Tax Returns
Look for Schedule K-1s showing pass-through income, depreciation schedules for hidden assets, and balance sheets revealing real estate or loans. - Analyzing Bank Records
Track deposits and withdrawals, especially recurring transfers to the spouse or personal accounts. - Examining Loan Agreements or Capital Accounts
Capital contributions, repayment plans, and shareholder distributions may disguise asset movement. - Inspecting Operating Agreements
These may show buy-sell provisions, ownership percentages, or terms for future distributions. - Cross-Referencing Assets
A boat, vehicle, or condo titled to an LLC may not appear on personal financial affidavits but is still subject to equitable division if acquired during the marriage. - Calculating Undisclosed Income
Undistributed profits or underreported cash flow can be included in alimony and child support calculations.
A Tampa divorce lawyer must work closely with forensic accountants to present a clear financial picture to the court.
Piercing the Veil: When the LLC Is the Spouse
Florida courts generally respect LLCs as separate entities, but they may disregard the structure if:
- The LLC is the spouse’s alter ego
- Corporate formalities are ignored
- The LLC is used to commit fraud or injustice
If the court finds that the LLC is being used to evade marital obligations, it may allow the opposing party to access its assets or income directly.
A Tampa divorce lawyer can argue for veil-piercing when the facts justify it—particularly if all business activity flows through the spouse without separation from personal assets.
Handling Undisclosed Entities in Mediation and Settlement
When a shell company or LLC is discovered mid-litigation or during mediation, settlement negotiations may be derailed. A Tampa divorce lawyer should:
- Pause mediation to request additional discovery
- Use asset tracing to determine value
- Renegotiate support or property division based on newly discovered income
- Include indemnification clauses in the marital settlement agreement
- Demand ongoing access to records if the spouse retains the LLC post-divorce
Failing to fully evaluate the entity before settlement may lead to post-judgment motions or enforcement litigation.
What Happens If Hidden Entities Are Found After Divorce?
If a shell company or LLC is discovered after final judgment, the innocent spouse may:
- File a motion to reopen the case under Rule 1.540(b) for fraud or newly discovered evidence
- Request sanctions or reallocation of concealed assets
- Seek attorney’s fees incurred in uncovering the asset
Florida courts take a strong stance against concealment. A Tampa divorce lawyer can use these remedies to hold the spouse accountable and recover the client’s share of hidden wealth.
Integrating Business Interests Into the Final Judgment
When an LLC or company is legitimately disclosed and valued, the final divorce judgment should:
- Award the business to one spouse with offsetting assets to the other
- Divide ownership if feasible (e.g., with detailed buy-out clauses)
- Require one spouse to refinance loans or assume liability
- Allocate tax consequences appropriately
- Address intellectual property, branding, or client lists
- Include provisions for indemnification or future audits
A Tampa divorce lawyer will ensure that business language is clear, enforceable, and tailored to the unique structure of the entity.
Conclusion: Shell Companies Can Be Exposed and Addressed
LLCs and shell companies may be powerful tools for asset concealment—but they are not impenetrable. With the right discovery strategy, forensic expertise, and courtroom advocacy, they can be identified, traced, and equitably divided under Florida law.
For spouses facing divorce in which the other party owns or controls a business, vigilance is essential. A Tampa divorce lawyer with experience in high-asset litigation will know how to locate hidden entities, compel compliance with financial disclosure laws, and ensure that every asset—regardless of its name on paper—is accounted for.
The presence of shell companies or LLCs doesn’t signal defeat. It signals the need for deeper investigation, strategic discovery, and aggressive representation. Florida’s courts demand financial transparency. With the right legal team, that demand can—and should—be enforced.
FAQ: Shell Companies and LLCs in Florida Divorce Cases
Can a spouse hide assets in an LLC during a divorce?
Yes, and many try. But a Tampa divorce lawyer can uncover these entities through discovery, subpoenas, and financial tracing.
Is an LLC considered marital property in Florida?
If the business was started or grew during the marriage, the value may be marital—even if the entity is titled in one spouse’s name.
How can I tell if my spouse owns a hidden company?
Look for unexplained bank transfers, unknown EINs, missing tax documents, or references to unfamiliar business names. Public records searches can help.
What if my spouse claims the LLC makes no money?
A forensic accountant can examine financials, cash flow, and bank activity to determine if income is being underreported or hidden.
Can the court divide a business in divorce?
Yes. The court can award the business to one spouse and compensate the other with offsetting assets or cash.
Is income from a hidden LLC counted for support?
Yes. Once uncovered, income from a shell company or LLC can be included in child support and alimony calculations.
Can I reopen my divorce if I find a hidden company later?
Yes. Florida allows post-judgment relief for fraud or newly discovered assets under Rule 1.540(b).
How do I subpoena bank records for an LLC?
Your Tampa divorce lawyer can issue subpoenas directly to the bank if the LLC has been identified.
What if the LLC is owned with other people?
Ownership may still be partially marital. The court can value the spouse’s share and divide accordingly, even if others are involved.
Can I get attorney’s fees if my spouse hid assets in an LLC?
Yes. Florida courts may award fees as a sanction for financial misconduct or discovery violations.
The McKinney Law Group: Divorce Lawyers in Tampa Who Understand What’s at Stake
At The McKinney Law Group, we recognize that divorce impacts every area of your life—your children, your finances, and your future. We help Tampa clients make strong legal decisions that provide clarity and security when it’s needed most.
We assist with:
✔ Filing and managing divorce proceedings under Florida law
✔ Creating custody and time-sharing plans that support your family
✔ Dividing complex marital estates, including investments and businesses
✔ Structuring fair and sustainable alimony and child support
✔ Modifying prior agreements to reflect life changes
Call 813-428-3400 or email [email protected] to get started.