Divorce Business Valuation

If you separate or get a divorce, and you own a business, the value of the business normally must be determined for purposes of dividing property.

A variety of factors may influence the value of a firm in a divorce, but the following factors tend to dominate:
1. The nature of the business
2. The history of the business from its inception
3. The specific economic outlook of the business
4. The general economic outlook of the industry that the business is in
5. The “book value” of the stock
6. The financial condition of the business
7. The earnings capacity of the business
8. The dividend-paying capacity of the business
9. The intangible value of the business (sometimes called “goodwill”). An intangible asset must possess two attributes in order to be considered as part of the valuation process. First, existing customers, an established business and a specific bundle of legal rights must be associated with the existence of any intangible asset. Secondly, the intangible assets must produce profits sufficient to support the investment.

Normally, your divorce lawyer will work closely with an accountant or business valuator to obtain the valuation.

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