When a couple that owns a business decides to get a divorce, the question of what to do with the business is an especially thorny one. The marital estate will necessarily include the business, so it must be evaluated and included by your Thousand Oaks divorce lawyer in the list of assets.
Valuing the Business
So how should you value the business? There are many factors and questions that your Thousand Oaks divorce attorney will use to answer this. Often neither spouse will really have a qualified opinion as to how to value the business. Moreover, the total income reported by many small business is often lower than it really is, and does not reflect its true economic income. Your Thousand Oaks divorce lawyer will recommend that both spouses work together to review the books and records of the company to come up with a mutually agreeable figure for the business’s income.
Another question that your Thousand Oaks divorce lawyer will consider when evaluating the business is whether to evaluate based on the value of the business to someone else, or the value of the business to the owner. Both schools of thought are used, depending on the circumstances. This is referred to as “fair market value” versus “fair value,” and both values can be substantially different.
Fair market value is generally defined, as your Thousand Oaks divorce attorney will tell you, as the price a hypothetical buyer might pay for the business. Fair value, on the other hand, is highly subjective depending on the context.
For Legal Assistance
For more information about how your business will be evaluated in a divorce, contact an experienced Thousand Oaks divorce lawyer. Call Gary Mitchell at 888-452-1846.