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Valuation of Your Business During a San Diego Divorce

On Behalf of | May 23, 2021 | Professional Practice & Business Ownership

The valuation of your business during a San Diego divorce can be a challenge.  How do you establish the “community’s” portion of the valuation of a company or professional practice during a divorce?

There are many ways to position the present value of a business, and as a result, a spouse’s community interest in the business.  The owner of the business will want the valuation to be as low as possible, while the other spouse will work for a much higher valuation of the company or professional practice.  This can be a complex issue, and requires an experienced divorce attorney who has the legal skill and sophistication to understand the nuances involved and guide you through the process.

The valuation of your business during a San Diego divorce is not a job for either of the parties.

There are many factors which are used to calculate an accurate business valuation.  An experienced business valuation expert can use one of many methods to determine the genuine value of a company.  The valuation method depends upon the nature of the business itself.  In many cases, each side retains their own expert or agrees to an independent third party.

When a disagreement arises regarding the valuation of the business the parties can negotiate to reach agreement or seek mediation as a private and confidential strategy to keep their private business out of the public record.  If the parties are unable to reach a settlement the Judge in your case will ultimately decide the valuation to be used.

If it is a small business you want to be particularly vigilant to assure no unfair or unethical monetary games are being played by the owner of the business.  We will need to carefully scrutinize the books and records.  In some cases forensic accounting and a thorough analysis of recent tax returns is required to get the real picture of the value of the company.

It is important to work with skilled divorce attorneys with experience in business ownership cases so the true economic fair market value can be ascertained and equally divided.   Our lawyers can help you find an appraiser and prepare the case so you are not deprived of the benefit of your one half of the business value of the community interest in the business.

Also, the fact the business was opened during the marriage leads to a presumption that it is community property in character. So it is not his business; it is ‘our’ business.  Although the amount in his partnership capital account is important it is not the defined answer or outcome determinative factor in valuation of a business.

The valuation of a business interest during a Carlsbad divorce is entirely separate and does not have any relationship to child custody, parenting time or child support issues.  If you are involved in a potential divorce involving business interests we invite you to protect your interests and contact us or call 760-389-3927 to schedule an appointment.