How Divorce Impacts Your Business:
Under California law, unless received by gift or inheritance, everything a divorcing couple acquires during their marriage is community property — including a business, a professional practice and intellectual property. In the absence of an agreement, which can occur before or after the decision to end the marriage, the courts divide business interests equally between the spouses, or award the business to one party and assets of equal value to the other party.
At Allen Family Law Inc., we frequently work with clients who worry how their divorce will impact their business or professional practice. In many cases, these individuals are business owners or professionals whose sole source of income is the contested asset. With so much at stake, it is absolutely critical to work with a family law attorney who is knowledgeable and experienced in the area of business and professional practice valuation.
We also represent spouses of business owners or professional practitioners who are entitled to their share of the business’s or practice’s value. Many times, these clients have had very little involvement in the day-to-day operations of the business or practice. In some cases, their spouse may have told them they are not entitled to anything from the business or practice, or that the business or practice is “worthless.” These types of scare tactics are often made out of ignorance or with an intent to intimidate. This is why it is important to conduct your own business or professional practice valuation with the help of attorneys and experts who will advance and protect your rights.
Our Approach to Business Asset Division:
When divorce has the potential to hurt your bottom line, it is important to work with attorneys who understand business procedures and business valuation. For over 45 combined years, we have worked with all types of business owners and professional practitioners to protect their interests and preserve their assets. We use a multi-disciplinary approach when valuing a business or practice. Depending on your specified needs, we work with accountants, economists, certified financial planners, tax lawyers, and industry experts to develop a valuation that is fair, accurate, and reasonable. While our first effort is to reach a settlement, if that becomes impossible we make sure that the valuation will be thorough and persuasive at trial.
We consult with experts qualified to perform several types of valuation based on the type of business or practice involved.
The Asset-Based Approach: This method values a business based on its total assets minus its total liabilities.
The Income Approach: In the income approach, experts assign a value by examining how much revenue a business generates as well as predicting how much future income it is likely to produce. This includes the important business or practice asset known as “goodwill.”
The Market Approach: Using this approach, valuators determine a business’s worth on the open market by comparing it to similar businesses, just as real estate agents assign a house a fair market value based on recent sales of comparable homes in the neighborhood.
Regardless of the particular method used, our experts rely on a variety of techniques to conduct a thorough analysis of your business. They may make on-site visits, examine company records, catalog inventory, and review accounts.
As any business owner or professional practitioner knows, no two companies are exactly alike. At Allen Family Law Inc., we retain business valuation experts who are experienced in handling your exact type of business or practice and its assets, both tangible and intangible. If you operate primarily a cash-based business with tangible assets such as inventory, equipment and machinery, we work with experts knowledgeable about your industry. If you run a business or practice that is mostly service-oriented, our business valuator will have extensive experience assessing customer relationships, intellectual property, business development, industry standards and “excess income.”
Contact Us : 619-232-2050