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Marital Property Division

How Can I Put a Value on Our Family Business?

One thing that can be very tricky to divide during a divorce, or, for that matter, during a separation between unmarried couples who also were in business together, is a small, privately-held enterprise.

Unlike larger businesses or those listed on one of the stock markets, it can be very difficult to get an exact price reflecting how much a share of the business is worth. Nevertheless, many couples acquire a great deal of wealth through these small businesses, and they rely on the business for their income.

As such, business valuation during a divorce or separation is both complicated and very important. Generally speaking, without selling the business on the open market, one would need to get the expertise of an accountant or business evaluator for assistance who understands the nature of the business and the Los Angeles market. Securing knowledgeable legal counsel is another important step one can take.

Still, it can be helpful to those going through a divorce or separation in California to be able to estimate the value of their business. There are a number of ways one can do so. For instance, a person can compare his or her business to similar ones that have been sold recently, thus getting some pictures of what an interested buyer would pay for his or her own enterprise.

Another method one can use is to think of his or her business as not just a bunch of assets and debts but also as a reliable stream of income. The question at that point is how much money one would be willing to accept in exchange for that income flow.