Who Should Conduct the Business Valuation During A Divorce?
There are options available to you:
1) The husband engages a valuer that the wife is satisfied with;
2) The wife engages a valuer that the husband is satisfied with; or
3) The husband and wife each engages an independent valuer.
First of all, do not try to figure out the business' value on your own
The worst thing to do is to try value the business on your own. The spouse will in most cases either undervalue or overvalue the company. Unless they or you have actual business valuation experience, it is highly advisable to engage an independent valuation.
Engaging a joint business valuer for the business valuation during the divorce
In the case where the husband and wife agree to engage one business valuer to conduct the business valuation, it carries along pros and cons to it.
The potential benefits to it can be the convenience and less costs involved as compared to each party engaging their own valuer. The biggest consideration to take note in this case would be - What happens if one spouse disagree on the valuation?
If this scenario happens, then the spouse can engage their own accountant or independent valuer to review the initial valuation.
Husband and wife each engages their own business valuer
Business valuation is both a science and an art, and since it deals with the logical interpretation of data, it is safe to say that reasonable minds can sometimes disagree. In the case of business valuation, one valuer may value the business different to another valuer and this is completely normal and common in the field of business valuation.
In such situations where both valuers provide reasonable arguments in support of their valuation, the spouses and lawyers can cooperate to reach a compromise. Of course in the case where a compromise cannot be achieved, then it may be best for the court to make the final decision. Therefore in any case, it is only recommended to engage a valuer whose interests aligns with yours, while having the ability to put together a strong valuation case for submission.
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