Q: Why do I need a business valuation for my divorce?
Q: What is a business as it pertains to divorce?
A: The definition of a business for divorce has a very broad definition. The following are deemed to be businesses:
- Corporations, Partnerships, and LLCs
- Sole Proprietorships
- Professional Practices – Professional practices include medical practices, dental practices, law practices, accountants, architects, financial consultants, IT consultants, and other consulting services. The practicing party does not necessarily have to be required to be licensed by a governing agency to be considered a professional.
- Agencies and Franchises
Q: What are the different types of business valuations?
Q: Is there a difference in cost between a Conclusion of Value and a Calculation of Value?
Q: Why does a valuation cost so much?
Q: What information must I provide for the business valuation?
A: The valuation firm should provide a document request and a questionnaire. The most important documents are business and personal tax returns for 5-years prior to the date of separation or date of division. The questionnaire will include many questions on the business and how it is managed. Following is a list of the most important documents to provide:
- Corporate Tax Returns for five fiscal years prior to the date of valuation. (Required)
- Owners’ Personal Tax Returns five fiscal years prior to the date of valuation. (Required)
- Balance Sheets for five fiscal years prior to the date of valuation and as of the Valuation Date. (Required)
- Income Statements for five fiscal years prior to the date of valuation and as of the Valuation Date. (Required)
- Asset list and detail depreciation schedules. (Required)
- W-2’s or Annual Payroll records for officers/owners (Required)
- All Operating Agreements (LLC), Shareholders’ Agreements (Corporation), or Partnership Agreements
Providing as much information as possible in a timely manner will assist the valuator in completing the valuation quickly and accurately.
Q: How long does it take to complete the business valuation?
Q: Do I need to hire a professional business valuator or can my CPA do the valuation?
A: You need to hire a professional business valuator that is accredited by one of the national business valuation organizations. Your CPA that prepares your tax returns and/or financial statements may be an accredited business valuator but may have a conflict of interest that will disqualify his or her valuation report in court. Your attorney can assist you in finding an accredited business valuator.
Our business valuators are bound by the professional standards to the National Association of Certified Valuators and Analysts (NACVA). This ensures that all work performed and reports issued will comply with the standards required of an expert who may be called upon to testify in court.