Who can value a business?
For the purposes of negotiating a family law settlement, parties can sometimes agree on a rough value of the business based on their knowledge. Sometimes, this is easy for very small businesses or sole traders. However, if the business is more complex, parties will often engage an accountant to provide an informal, estimated value of the business.
When there is a dispute about the value of the business or the matter is proceeding to Court, a formal family law valuation needs to be conducted. For a formal family law valuation, an expert business valuer should be used. There are certain legal requirements that a valuer must comply with, and they have to meet professional standards in their field. Our team can assist you with finding an appropriately qualified valuer.
Who chooses the valuer?
Except for certain exceptions, the Court will usually require a jointly engaged single expert valuer. This means you and your ex-partner need to agree on who will conduct the business valuation. Usually, we would suggest that one party selects three potential valuers and the other party chooses one of those three.
What does the valuer need?
Both parties’ solicitors will usually jointly write a letter to the valuer to engage their services. In this letter, the solicitors will request a valuation and inform the valuer of any extra information they may require. The solicitors will also usually send the valuer financial statements, tax returns, trust documentation, and information received from the business’s accountant. If any additional information is needed, the valuer will usually contact both parties’ solicitors to request it.
What does the valuation take into account?
A valuer will look at the businesses bank accounts, contracts, any goods or property it may own such as machinery or vehicles, employees, and goodwill. Exactly what is included will vary depending on the industry and the specific business involved.
Who pays for the valuation?
Usually, the cost of a valuation is evenly shared between the parties. Sometimes, if one party will struggle to pay, the other party will cover the cost initially and be repaid out of any settlement.
What to do next?
If you would like to discuss property or any other family law matter, contact us on 8391 8411 to book a free 30-minute consultation with us to discuss what steps you should take next.