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Calculation of the Value of a Business in a North County San Diego Divorce

On Behalf of | Apr 18, 2019 | Professional Practice & Business Ownership

If you are considering a divorce and you or your spouse jointly or separately own an interest in a business one of the most important issues will be the calculation of the value of a business in a North County San Diego divorce case.  When a divorce includes a business or professional practice the first step to determine the community interest in the business itself is to establish a “valuation.” Valuation is accomplished through many different strategies depending upon the nature of the business or professional practice itself.  Usually, the valuation of a business interest or professional practice is established by:

1. Selling the business interest and dividing the proceeds according to community property rules
2. Hiring an expert to establish the valuation through complex industry specific calculations
3. Using an income “factor” to multiply annual income by a specific industry factor based upon the nature of the business

These steps can be quite contentious and take a long time to complete, however a full valuation is required whenever a Judge will be required to make a ruling regarding the valuation of the business or a distribution of community property. In some cases, the parties can agree to a “calculated value” which is used during negotiations until a full valuation is received or ordered by the Judge.

What happens if the owner of the business interest doesn’t wish to sell their interest or the business?  How is “good will” factored into a professional practice valuation?  Do you have to accept the valuation of the business interest established by the business operating agreement or professional practice agreement?

The calculation of the value of a business in a Carlsbad is the crucial issue in cases involving a business or professional practice.  Business ownership interests can be quite complex, and it is important to seek the counsel of the experienced and seasoned Carlsbad divorce attorneys at Burke & Domercq to ensure your interests are protected.  We invite you to contact our office, or call 760-389-3927 to schedule an appointment with one of our proven attorneys.