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Business valuation plays important role during divorce process

On Behalf of | Nov 8, 2017 | blog |

As business owner going through divorce, you certainly want to do what you can to protect your business. When company assets are at stake, you may feel a particular anxiety toward your proceedings as these assets could add a layer of complications that other individuals may not have to deal with during their proceedings. One particular issue that will need attention relates to business valuation.

The value of your business could vary depending on a variety of factors. These factors could range from the seemingly minute, such as the date that the valuation takes place, to substantial, such as the valuation standard used. Therefore, you will undoubtedly want to ensure that you take every aspect of the valuation process seriously.

Valuation date

Though the date that the valuation takes place may seem inconsequential, it can actually have a considerable impact on the valuation outcomes. Because of this impact, you may want to determine the exact date on which the valuation will take place. In some instances, more than one valuation date could potentially go into use, likely to compare valuation fluctuation. Some examples of valuation dates relating to divorce may include date of trial, separation, petition filing or the completion of the divorce.

Valuation standard

Different standards of valuation exist, and the standard that applies to your case may depend on certain circumstances, including Texas state law. When it comes to determining the correct standard, having professional guidance may prove wise. However, in the end, the standard used may come down to the choice made between you and the valuation expert. The most commonly used standards include fair market value, investment value and intrinsic value.

Valuation differences in divorce

Though you may understand the importance of business valuation when it comes to buying and selling companies, you may want to also understand that valuing businesses for divorce can prove different from transactional valuation. Because of the differences, you may wish to explore how your company’s value may be impacted differently than if you obtained value for buying and selling purposes.

Business valuation in any capacity can be a complicated affair. Though a valuation expert could help you in this endeavor, you will likely want to ensure that you have some understanding of the process as well. Additionally, you could also find it useful to utilize local legal resources to find out more on dividing business assets in divorce.