For various reasons, small business income reports may not be an accurate reflection of its correct income. Taking steps to guarantee that the enterprise’s income is declared as accurately as possible is important. Steps may include a mutual review of the company’s records and books by both parties, agreement by both parties as to the business income, or a referral to an accepted expert for valuation adjustment.
Expert Referral
A divorce lawyer in Lowell knows there are basically two accepted methods of assigning value to a business during a divorce. Some jurisdictions maintain that the business value consists of what its worth is to the owner while others maintain that its value is its worth to an individual other than the owner. This can sometimes be described as fair value versus fair market value. Applying these two different value standards may cause serious differences in the value of the business.
The price a hypothetical willing buyer will pay a willing seller for a business is typically considered to be the definition of fair market value. However, this concept is greatly dependent on the specific context and may be significantly subjective. For instance, the standards some states use for fair value in stockholder disputes may not necessarily be the standards used in divorce proceedings. Additionally, counties or judges within a particular state may hold to different standards, and sometimes judges and experts use the terms incorrectly. All of these factors lead to confusion and inaccuracy.
Legal Counsel
Assigning a value to your business can be difficult and confusing. Contact the Law Office of Bruce A. Gage at 978-384-1078 or toll-free at 877-829-0831 to schedule a free consultation with an experienced and knowledgeable Lowell divorce attorney.
