Things to Know About Business Valuation in a CA Divorce


  • Added By :Laurence Brock
  • Category : Personal Injury Law
  • Article Id : 2023
  • Added On : 28/06/2019
  • Views : 286

If you are going through a divorce or considering one, you are likely worried about how businesses are divided during the divorce process. This is a major concern for those who are getting a divorce when the couple shares a business that they started together. 

If you own a business that was started before the marriage and was protected by a prenuptial agreement, you might not have to worry about your business. However, if the business falls under community property, then you will have to figure out how to come to an arrangement for the business. 

How to Resolve Disputes Over a Shared Business

There are different methods for resolving disputes related to a business that is shared between the spouses. 

  • For instance, you and your spouse could agree to continue running the business together, despite the divorce. 

  • One person could agree to gain control of the business while the other one gets control of the house and other property that is of equal value to the business. 

  • One person could buy out the other person’s interest in the business. 

Again, there are many different ways to handle this situation. However, no matter which method you choose to use to resolve a dispute over a shared business, you will first have to get the business valued. This means that someone will decide how much the business is worth. 

Valuation of a business is complex, as there are many different factors that come into play. A business is always growing and changing, and profits can increase or decrease each year. It’s not something that is easy to place a set value on. Nevertheless, it can be done. Here’s how.

How a Value is Assigned to Your Business in California

All community property in a divorce must be split, and this includes any shared businesses. First, your business’s value must be assessed. You will likely need to hire a business appraiser to assign a value to your business. The appraiser will likely look at several different aspects of your business to come up with a value.

  • The value of the business’s fixed assets

  • The value of intangible assets, such as growth potential

  • The business’s liabilities and debts

The court will review the appraiser’s assessment to see whether they think it’s a fair assessment before signing off on a business valuation. Once your business has been assessed, and once all other property has been assessed, it’s easier to split your property between you and your ex.

Partner with a Divorce Attorney in California

There’s no question that placing a value on a business is not an easy task, and you might be worried about how things will shake out. No one can guarantee you the result you’re after, but a California divorce lawyer will strive to get you the best case outcome possible.