Business Valuations | Divorce | Men's Legal Center


California Law and Business Valuations

San Diego Divorce Lawyers
Business Valuations

There are many situations where spouses decide to pursue a California divorce and one of the parties to the case owns a business either outright or has an ownership interest in a business entity.  Unfortunately for those involved in these situations, such a scenario can bring about complications because of the value that needs to be assigned to this asset.  Those who are in this position should seek the help of experienced San Diego divorce lawyers as soon as possible, and below is a brief overview of how this step in the California divorce process should work.

Realities Concerning Business Ownership and California Divorce

California is a community property jurisdiction, which means that all marital assets are basically split evenly between the parties to a divorce.  However, it’s clearly not possible or practical to simply sell a business and provide each spouse with half of the cash proceeds. Instead, the ownership interest in a business needs to be assigned a value that can then be used as a point of reference when dividing the marital estate. Business valuations are complicated in nature, and this step needs to be completed accurately in order for the dissolution of the marriage to ultimately occur.

Steps Relating to a Business Valuation

Many people think that a simple equation that relates to the revenue and cash of a business will provide the proper figure in terms of the value of a business ownership asset. That is simply not accurate, and several steps may need to be taken to properly place a value on that ownership interest in a California divorce.

These steps may include working with CPAs and other financial professionals who can analyze a business, obtain an understanding of the percentage of ownership that’s both currently held by one of the spouses and that will be held in the future, review documents that detail certain aspects of that business and finally coming to a conclusion regarding the value of the ownership interest at issue.

These steps may be somewhat straightforward or they could be extremely complicated and time consuming, but regardless of the work involved, the court will require an accurate accounting of this asset before it agrees to dissolve the marriage. That’s why San Diego divorce lawyers with experience will employ the help of experts who understand this process and who will provide an accurate result for the parties involved.

If you are contemplating a divorce and there is a business ownership interest involved with the marital estate, you need to make sure that this step is handled properly to avoid delays and additional costs. Contact the San Diego divorce lawyers at the Men’s Legal Center to schedule an initial consultation so you can obtain an understanding of how the firm’s professional network can help you move on with your life.

Call us at (619) 234-3838

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