When settling the value of a marital estate, a family-owned business becomes part of the calculations. The article below addresses how value can be assigned to a business.
Part of the Marital Estate
If you and your spouse own a business together, it is unlikely that you will sell that business as part of the process of dividing your combined assets. You and your family law attorney must therefore reach a figure at which the business may be valued in order for it to be properly considered in the marital estate.
Depending upon the level of experience in such matters that is possessed by the couple, the value of the business is set in much the same manner as it is for most other forms of property. The couple can research comparable businesses through the appropriate publications or over the Internet in order to form an estimate on which they and their Richmond family law firm attorney can base a reasonable consensus. Failing this, there are experts in this field whose services can be engaged should the need arise.
Under the usual circumstances, however, divorcing spouses do not have a very comprehensive understanding of what must be taken into consideration during the valuation of their business. In order to avoid possible errors or inaccuracies by consulting sources that may or may not be reliable, the assistance of an accredited business valuator is advisable. This person’s resources and experience are such that guesswork can be avoided and inaccuracies minimized.
Minimum Fair Market Value
The very least that any business can command in value is the amount that, once its debits had been subtracted from its assets, it would fetch on the open market if it were offered for sale. This is its minimum fair market value and is the usual manner in which value is assigned to a great many small business operations.
Small Businesses As Employers
In most small business situations, the operators pay themselves approximately what someone else might pay them for a comparable position. They not only own the business, they work there. However, unlike the employee who is simply paid for the day’s work, the business owner both reaps the profit and pays the debts that are associated with the operation. In order for the business to exceed the minimum value, therefore, the business owner’s pay must be somewhat higher than a similar position in the job market.
Make The Call Today
Don’t hesitate another minute to engage the services of a family attorney in Richmond or Williamsburg to help you with your divorce proceedings. Call Van Smith at 804-325-1245 or 757-941-4298 for sound legal advice and assistance.