If you own a company and are considering divorce then you have a double doozy: Considering your personal finances and the finances of your company. At Law Offices of Torrence L. Howell, you have found a firm that specializes in both business law and family law, making us the perfect choice for these complex divorce issues. Keep reading to learn how the business valuation works in a California divorce, then contact us at (909) 920-0908 for a consultation.
Businesses Can Be Valued in a Number of Ways
Some businesses are easier to value than others, depending on the accounting style and the payment style. However, most business valuations in California will cover one or more of these approaches: Income-based, asset-based, or market-based.
Regardless of the type(s) of valuation used, you can count on each of the approaches to consider how profitable the business is, the goodwill of the business, and both intangible and tangible assets of a company.
There Are Options to Determine Who Values the Business During the Divorce
One of the most concerning questions for many during the divorce process is who is going to conduct the business valuation. The answer can be complicated. In most cases, there will actually be a few options available to them. First, they can attempt to figure it out themselves. This is a bad idea in most cases because one spouse will want to overvalue and the other is likely to want to undervalue.
Second, you can hire a joint forensic accountant who can value the business. This is the most cost-effective option, but some spouses don’t trust that this accountant will be unbiased. In that case, they often choose another forensic accountant to audit the work of the first.
The final option is for both spouses to hire their own forensic accountants. These accountants are not working against each other – they are work separately and coming to their own conclusions. Once these accountants have completed their work, you may need to then negotiate with your spouse to determine how to decide on differences in opinions.
Work with an Attorney Who Has Specialized Experience
It may seem that the business valuation process is complex, and for good reason: It is! This is why you need both a family law attorney and a business attorney. This does not have to mean hiring two attorneys – it can simply mean working with Law Offices of Torrence L. Howell.
We understand the complications of divorces that involve business valuations. We know what your goals are and we share them. if you are ready to get started today, contact us at (909) 920-0908 for a consultation.