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What is your business worth? You need to know before a divorce

On Behalf of | Mar 14, 2018 | Blog |

As a business owner, you know that a divorce will bring various significant financial changes to your life. You likely have concerns over what the end of your marriage will mean for your business, but there are ways you can protect your interests. One of the things you can do is to understand how the process of dividing marital property will work and how it will impact business operations.

One of the most important steps for a business owner is to have an accurate evaluation for what your business may be worth. Business valuation is a process of determining the dollar value of your company, which is a key component in obtaining an equitable and fair property division order of the entire marital estate. Many Texas business owners find it beneficial to seek experienced legal guidance from a Board-certified Family Law expert attorney as they prepare for a high-asset and potentially high-conflict divorce.

How does it work?

There are various methods used to accurately determine the value of a business. Important decisions regarding the future of your business depend on the accuracy of the business valuation. By using objective measures and specific techniques, the valuation process considers factors such as:

  • The value of assets owned by the business
  • Projected profitability in the future
  • Analysis of the management of the business
  • The structure of the business
  • Evaluation of revenue streams
  • Analysis of cash flow and liabilities

There are multiple methods that could be used in order to determine what your business is worth. You may find it beneficial to explore all of these methods and move forward with a decision that could be most appropriate for the unique nature of your business.

In a Texas divorce, the courts will strive for a division of marital property that is equitable, but not necessarily equal. You have the right to seek a final order that is fair and allows for the successful continuation of your business operations, whether that is through a negotiated agreement or in court.

During divorce, a lot is at stake

Divorce is complex and can be difficult, regardless of the value of the assets you own or the amount of money at stake. However, a high-asset divorce involving a business brings special considerations you may not want to face alone.

When your financial security and the interests of your business are at stake, you would be wise not to make emotionally charged decisions, but to focus on the well-being of your company long into the future. Accurate and fair business valuation is an important part of helping you accomplish this goal.