When a couple has substantial assets, the process of valuing and dividing marital property can be challenging. Matters only become more complex when a divorcing couple owns a business, as it must be included in the equitable division of assets.
If you are struggling with valuing a business in a Des Peres high-asset divorce, a seasoned attorney is here to guide you through this process. At Jones Family Law Group, LLC, our lawyers will pursue every avenue to ensure your business is given a fair value and that it is protected throughout your divorce.
Why is Valuation Important?
According to state law, most of the assets acquired during the course of a marriage are treated as marital property. This can include a business formed during the marriage and ventures that proceeded the union.
The valuation of these businesses—particularly in high-asset divorce cases—plays a vital role in the division of marital property in Des Peres. If a company is undervalued, the spouse that ends up with it could receive a windfall. Alternatively, an overvalued business could represent an unfair financial burden.
Notably, valuation in cases where business assets must be sold or divided between spouses can be devastating for the future prospects of a business venture.
Understanding the Value of a Business
On a basic level, the value of a business is the total value of its assets minus any liabilities it owes, plus any goodwill. Of course, determining the value of these assets and liabilities is much easier said than done; particularly when it comes to valuing goodwill. There are numerous factors that must be considered when you place a dollar value on a business.
The first step is to review and consider the financial records of a business. It is not enough to check the balance of a bank account. Often, earnings are cyclical, and the true value of a business can be much greater than its cash on hand. That is why it is essential to look at both assets and income together when determining the value of a company.
The reality of this process is that not everyone will agree on a valuation. For example, the party selling a profitable company is likely to believe it is worth more than someone who is only casually interested in purchasing it. Given these variations in value, it is important to seek the guidance of an experienced attorney when valuing a business in a Des Peres high-asset divorce. A diligent lawyer from our firm can aid in the assessment process, identify any hidden assets that might impact a valuation, and protect the interests of the business throughout this process.
Valuing Portions of a Business
One of the most complex aspects of valuing a business in a Des Peres high-asset divorce occurs when the spouses only own a portion of a business. It is one thing to divide up business assets equitably during the divorce process, but another to attempt a valuation on a business that has other owners.
When a company has stock or the ownership stakes are broken down by shares, an attorney from Jones Family Law Group, LLC, could help place a value on the business and determine the percentage of value you own.
Get Professional Help with Valuing a Business in a Des Peres High-Asset Divorce
If you and your spouse own a business and are considering a divorce, you could greatly benefit from the assistance of experienced legal counsel. A committed member of our team could evaluate every aspect of the business to determine its true value. If you are prepared to get started with your business valuation, reach out to Jones Family Law Group, LLC, for a confidential consultation.