Business Valuation In Divorce
Dividing assets often proves to be one of the most difficult aspects of divorce. The situation can become even more complex when one of the assets that a couple owns is a business. In these cases, a business valuation will play a crucial role in helping the parties reach a fair agreement on how they will dispose of that, and any other, assets during divorce. Read on to learn more about the different methods of business valuation used during a Florida divorce.
A Professional Valuation
When a couple divorces, they are required to make in-depth financial disclosures about their assets and debts. These disclosures, however, are even more detailed when a business interest is involved, with the parties needing to divulge profit and loss statements, financial records, receipts, balance sheets, invoices, and tax returns. However, this information, on its own won’t be enough to place an accurate value on a business. To do that, couples are usually encouraged to reach out to a qualified professional who can conduct an independent review of the company’s worth.
There are a variety of valuation methods that experts use when determining a company’s worth, but the three most common are:
- The income-based approach, which involves an assessment of the business’s future earning capacity;
- The market-based approach, which involves comparing a business with similar companies in the area that have recently been sold; and
- The asset-based approach, which involves reviewing the values of the business’s assets, like equipment, cash, and even reputation.
Regardless of the method used, when the valuation is complete, divorcing couples can move on with the property division process with a better idea of what would qualify as an equitable share of their marital assets.
Property Settlement Options
Once a couple knows the value of an asset they can decide on the best course of action moving forward with settlement negotiations. For instance, if one spouse wants to keep the business, then he or she may need to relinquish another asset with a value that is equal to that of the company. Alternatively, one spouse could buy out the other’s share in the business. If, on the other hand, neither spouse wants to keep the company, then they could opt to sell it, using a list price that is based on the valuation report and then dividing the proceedings fairly. For help coming up with a property settlement agreement that is best for your family, don’t hesitate to reach out to our legal team today.
Available By Phone or Online Message
If you and your spouse own a business and have questions about the valuation process, or how to go about negotiating the division of that asset during divorce, feel free to call experienced Florida property division lawyer Sandra Bonfiglio, P.A. at 954-945-7591 today. You can also set up a free consultation by reaching out to a member of our legal team via online message. We are prepared to get started on your case right away.