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13.1 Business interest

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  • 13.1 Business interest

    I am having trouble completing the 13.1

    I work as a Stock broker. My firm owns my client list and assets. However, I get an income from this list of clients. If I retire, I could sell the assets to another advisor. However, if I am fired or leave the firm I have a non-compete clause that prevents me from taking the clients. But if a client contacts me they could come with me. How do I value with on the 13.1?

  • #2
    Would your situation be similar to that of a commisioned sales agent who is assigned a geographic area or specific corporate accounts?

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    • #3
      Hard to say. I have goodwill in the book of business. But I do not own the business. in your example, how would you define that in the 13.1?

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      • #4
        How old are you ? That is, how far away (roughly) are you from retirement ?

        If you've got quite a few years before retirement, then I would suggest that the value of the business AT TIME OF SEPARATION is basically "nil". That is, if you HAD to sell it NOW - you would get zero , right ? Since you don't own the client list.

        I would enlist the advice of a good lawyer/accountant or someone who specializes in appraising businesses for their opinion. My understanding is that the assets are valued at time of separation (ie. how much if you had to sell them). Since I suspect you CAN'T sell the business (unless you're going to retire which I'm guessing you are years away from) then the value is zero.

        However, I would get something from a 3rd party that is recognized by the courts confirming this so there is no dispute down the road.

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