Going through a divorce is a difficult process. Reaching an agreement that satisfies both parties can be a challenge. Dividing the family is a sensitive process. Many do not know what to expect when it comes to the distribution of property and finances. While some just want what they feel entitled to, some go for all they can get. Seeking legal representation will ensure that everyone gets their share in accordance with the marital state laws.
Business Ownership and Divorce Rights
- The dollar value of a business could be determined by both parties reaching an amicable agreement on the dollar amount. The court will then divide that valuation according to the established agreement.
- Certified experts will do the necessary research to determine the value if the parties are unable to reach an agreement. The specialists that the parties enlist usually include a Business Appraiser and a Public Accountant.
- In some cases it may be best that each party have the business assessed by their own certified professionals. Their findings and testimony in court will support their individual cases. One party may feel entitled to more than the other. This type of conflict will mostly likely require litigation to obtain a resolution.
Determining the Value of a Business
- Assets – This approach uses tangible and intangible assets to calculate its value minus the liabilities. Each part of the business is assessed. The valuations of these areas may not match the company’s book value. It is typically used for small business owners.
- Income – This valuation utilizes the business’s capital cash flow (CCF), its discounted cash flow (DCF), and excess cash flow accrued by credit agreements. This approach focuses on calculating the overall future profits of the business. One fixed value is determined for distribution.
- Market Value – This approach determines the value based on how it compares to other businesses within the same market. The market value may be lower than anticipated due to sales data not always being submitted.
The parties can easily decide to settle for an equal share of the business’s value. Determining who is entitled to more or less is left up to the judicial system. Having business contracts and financial documents in order can serve as supporting evidence in the discovery process.