Taking a comprehensive approach to marital assets in York, Lancaster, and Chester Counties
Business owners stand to lose far more than a spouse when they enter into divorce proceedings. If your company and its assets are improperly valued, you could lose the business itself, or find yourself being denied an equitable share when assets are divided. Holland Law in Rock Hill and Fort Mill offers business owners peace of mind during their divorce proceedings. My specific skill set and background, combined with years of experience representing divorce and family law clients, give you an advantage. Contact the firm today to learn more.
How is a business valued in a divorce?
There are generally three standard methods for business valuation:
Asset based method
Under this approach, the total liabilities are subtracted from the total assets to determine the cost of restarting the company. This method offers a rough estimate, as it doesn't always account for all recorded assets owned by the business. The information calculations are based on a company's balance sheet, which doesn't always hold a complete picture of the company's value.
Under this approach, the appraiser calculates the current value of the company based on the future projected earning capacity of the business. This is accomplished through something called capitalization of earnings. This method is often used when considering a sale of the business, as it considers the return on investment for potential buyers.
Market value method
Under the market value approach, an appraiser looks at the sales of comparable businesses to develop a picture of what your business may be worth. Market value analyzes the sales of similar assets, and adjustments based on quality, quantity, or size. There are two methods under this approach:
- The Guideline Public Company Method, which uses prices of similar publicly traded companies.
- The Guideline Transaction Method, which uses prices of recently sold related companies.
Determining the true value of your business assets can be a challenge. In some cases, it requires hiring a specialist in the field to analyze the cash flow, assets, and liabilities to ascertain a realistic figure for asset division. The date of the valuation makes a difference, especially if the market has been volatile since your last assessment.
Why do I need a business valuation?
Depending on how your business is structured (among other things), part or all of it could be considered marital property – and that means it would be subject to equitable division in the event of a divorce. As such, your spouse could be entitled to a portion of the profits or require you to buy them out of your business, even if he or she retains no ownership rights.
In short, the value of your business must be accurately assessed in order to ensure that it (and you) are protected in the event of a divorce.
Why Holland Law is the right choice for you
Business valuation requires more than just looking at numbers on spreadsheets: it requires an in-depth understanding of tax and IRS regulations, an ability to read the market, and the assessment of less tangible assets, like “goodwill” towards your company.
Because of my background in pension structure and division, my business education and my experience, I am uniquely qualified to help my clients with the valuation of their businesses. Most likely a business valuation expert of forensic accountant will be hired to perform the valuation. However, it's important you have a knowledgeable attorney to assist in the conduct of the valuation, and the interpretation of the results. In cases where outside expertise is required to make an accurate assessment, I already have a network of trusted professionals who can help you.
You may have a general idea what's at stake financially when you embark down the road of divorce. What you may not understand is the affect assets may have on your long term financial health unless you ascertain their true value. Holland Law is here to ensure that business clients in York, Lancaster, and Chester County are treated fairly during divorce.
Protecting the assets of clients throughout the Upper Midlands
You spent a lifetime building your business; let me help you protect it, To learn more about my business valuation, call Holland Law at 803-836-8680 to reserve your consultation in either my Fort Mill office on Gold Hill Road, or in my Rock Hill office on Oakland Avenue, or feel free to reach out to me through my contact page.