Accountability

DIVORCE AND YOUR BUSINESS

Alan McGillivray - Tuesday, November 06, 2018

It's a fact of life that in Australia, one in three marriages end in divorce.

The emotional stresses can be immense, while the financial strains are no less concerning.

Complicating all this is if one or both spouses enjoy an interest in a business or professional practice.

While most business owners only ever think a business valuation is needed when buying or selling - marital, partnership and trust disputes are also reason enough.

Different valuation methods are employed for businesses that are wholly or partially owned by the parties, and for those which are closely held.

Remember, when a business is valued for the purposes of a property settlement, it is not the same as the value a business would be sold for.

In a property settlement, the valuation looks at the value to the owner/s, in other words, what are the benefits the owner/s would receive if they retained their interest in the company.

All businesses have their own story, so there is not one set method that is used to value a business.

Whether a business is ongoing or operations have ceases, earnings stability and whether the business has any "goodwill" are just a few of the many factors which must be considered.

The common objective of most business valuation assignments is to estimate the “Fair Market Value” of the business,

The dilemma in all this (and any valuation where disputed entitlement is concerned) is each party will have a very different opinion on the value of the business…depending on how they might stand to benefit.

Divorce or separation is trying, what you don't need is additional grief and burden. A professional business valuer can put together a written valuation report that transparently addresses all of the relevant matters where any subjectivity is possible.




About Alan McGillivray & Associates

With more than 20 years experience, we service clients ranging from small businesses to medium sized enterprises up to $50M in turnover. Our goal is to help you achieve success in growing your business sustainably and profitably.

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