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When divorcing, businesses need valuating

On Behalf of | Apr 24, 2018 | Community Property Division

The value of a business can play a major role in many aspects of the company. Knowing the value could prove important if someone wants to buy the company or when considering other possible business ventures and the potential impacts such moves could have overall. Of course, another situation in which this information proves vital is during divorce.

Whether you own the company, co-own with a spouse or have no direct dealings with your spouse’s business, its value can impact the terms of your divorce settlement. Therefore, you will certainly want to make sure that you understand the importance of obtaining a business valuation.

Separate valuations

First of all, it may prove wise for you to gain a valuation yourself. While your spouse may also take steps to determine the value of the business, having this action carried out twice may prove wiser than trusting your spouse to provide the correct information. In fact, he or she could obtain a valuation and then provide false information to you in hopes of gaining a better settlement outcome for him or herself. To avoid this misstep, obtaining your own valuation could prove prudent.

Professional valuator

When seeking a proper valuation, utilizing a professional would work in your best interests. Various types of professionals could conduct the process, including:

  • Financial analysts
  • Business appraisers
  • Business brokers
  • Certified public accountants

Before deciding on which professional you would like to use, you may want to remember that the future value of the company could impact your divorce settlement. Because of this factor, you may want to ensure that the valuator knows how to analyze and predict future earnings and not just examine past figures.

Other factors go into consideration when determining value as well. Some of those aspects include:

  • Current total liabilities
  • Value of company assets
  • Earnings history

Once a valuation has been determined, you may have a better idea as to how the value of the business may impact how you move forward with your divorce.

Business and divorce

Divorce can have considerable impacts on a company, and it can often make the marriage dissolution process more complex. Fortunately, you can obtain reliable information on how to address this asset and your options for property division. Additionally, experienced legal professionals could help you better manage your case and determine what actions could help keep your best interests at the forefront.

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