If a business is owned by one or both of the parties, it is a good idea to get a business valuation from a private expert. If the business was acquired during the marriage or if it was operating during the marriage, it is a marital asset regardless of who actually owns the business on paper.
It is important to choose the right business expert for your specific situation and business. Your attorney can be helpful during the selection process. To conduct a comprehensive business valuation, the financial expert will need to understand the particular type of business, the local market, and the business’s reputation.
A good expert will also look at the good will toward the business, the number of customers, the business’s reputation in the community, and the financial and sales information when making a determination on the value of the business. In total, the chosen expert should look into the following in order to accurately determine the value of the business:
- Cash flow
- Accounts receivable
- Intellectual property
- Business goodwill
A business valuation can be highly subjective and will be looked at based on reasonableness throughout the valuation process. Further, if the business at issue is a family business (one with few or no shares publicly available and usually owned by members of the same family), it may be particularly difficult to value the business because there may be a shortage of similar business to compare it to for valuation purposes.
A business is often a high-value asset during a divorce and it is important to have an accurate valuation early in the divorce proceedings in order to ensure you are protected. This business valuation can effect both spousal maintenance and property division during a divorce and it is important to retain an attorney who understands this and has experience with business valuations during a divorce, especially if the business is a high-value asset.
If you face a contentious divorce and are concerned about the impact of the valuation of your business, please, contact our office today at (651) 647-0087 or on the web at firstname.lastname@example.org. Our experienced Minnesota divorce attorneys will work closely with you to achieve your goals.