Easing The Stress Of Your Family Law Matter

Business valuations for divorce are complex

On Behalf of | Aug 2, 2019 | Family Businesses

Running a family business with your spouse is sometimes a challenging situation. If you are going through a divorce with that person, you will have to make some tough decisions about the future. Before you settle on any single option, you need to have the business valuated. This can give you an idea of what’s in your best interest from a financial standpoint.

There are two primary standards for business valuation, so you must find out which is being used for yours. These are the fair value and the fair market value. The fair value means that there aren’t any discounts for lack of marketability or lack of control. The fair market value does include those two discounts, so it might be a much different value.

In all cases, the valuation determines what price the business would be sold for at that specific time if there was a willing buyer available who wasn’t being forced to buy. A lot of work goes into the valuation because the person handling it has to consider a host of factors, including the income and debts of the company.

Once you have the business valuation available, you can decide if you want to sell your part of the company to your ex, continue to run the company with your ex, buy your ex out of their share or sell the company altogether. For some, the answer might be to just close the business. Thinking about these options independently and considering the financial impacts of each might help you to find the answer that you need.