Denver Business Valuation Lawyer
A business is worth more than the building itself and the value of the goods and property associated with it. Loyal customers, good will, and years of hard work can all influence the value of a business. At The Law Offices of Rodger C. Daley and Associates, our Denver divorce attorneys understand the importance of accuracy in putting a value on a business that is subject to division or allocation in a divorce. No matter where you are in Colorado, we can assist you.
How To Value Your Business For Asset Division
Our lawyers work closely with commercial real estate appraisers and forensic accountants to determine the value of businesses. When representing divorce clients who own businesses, we do everything possible to minimize the impact to the business by dividing the estate without adversely affecting the ongoing business operation.
Dividing a family business may seem like a difficult task, but in reality, it is often simply a matter of creative and ardent negotiation. In effect, most cases that involve family businesses can be resolved through settlement.
A common misconception is that owning a business or businesses with your spouse means divorce is impossible. This is simply not true. Our lawyers have the knowledge and experience to help you navigate the emotional and legal aspects of divorce so that you – and the business – can move forward.
Different Approaches to Valuing a Business During a Divorce
Valuing a business during a divorce can be approached through three primary methods: asset-based, market-based, and income-based. For instance:
- Asset-based: The asset-based approach focuses on the company’s net asset value by subtracting liabilities from the total assets. It is a straightforward method, but it may not fully capture the business’s earning potential.
- Market-based: The market-based approach evaluates the business by comparing it to similar businesses that have been sold recently. This method considers current market conditions and provides a realistic valuation based on what buyers are willing to pay.
- Income-based: The income-based approach, often regarded as the most comprehensive, calculates the business’s value based on its projected income. This involves projecting potential earnings in the future. Then, they are discounted to present-day value. This offers a clear picture of the business’s financial health and potential profitability.
Each method has its merits, and choosing the right one depends on the specific circumstances of the business and the divorce.
Business Assets Involved During a Business Valuation in a Divorce
When valuing a business during a divorce, you must consider several key assets:
- Family and closely held businesses: These are often privately owned businesses where ownership is restricted to family members or a small group of shareholders. The valuation of these businesses is crucial as they may represent a significant portion of marital wealth.
- Income generated from business: This includes all revenue streams the business produces. Evaluating this income is essential for understanding the business’s profitability and future earning potential.
- Commercial real estate: Properties owned by the business, such as office buildings, warehouses, or retail spaces, must be appraised. These assets can significantly impact the overall value of the business.
- Other business property: This category includes tangible assets like vehicles, machinery, equipment, and inventory. These items contribute to the operational capacity and overall value of the business.
Each of these assets plays a critical role in forming a comprehensive and accurate business valuation during a divorce.
Contact The Law Offices of Rodger C. Daley and Associates
With over 30 years of experience in this area of the law, our Denver business valuation attorneys are aware of the complications that can arise, and know how to resolve them. When necessary, we offer evening and weekend appointments. Contact our office in Denver, Colorado, at 720-773-5708.