BUSINESS VALUAtions and family law
If you are separated and you or your partner own a business under the same name or jointly, you will need to make a decision about what to do with the business. In most cases, the business remains with one party, but it can also be sold or dissolved if the parties agree or by order of the court. Depending on the circumstances, a business valuation is usually not required when selling a business, as the sale price of the business is usually equal to its actual value. If the business is passed on to you or your ex-partner, it is important that the business is properly valued.
Business Valuations - The Process
To negotiate a family law settlement, the parties may be able to agree on the approximate value of the business based on what they know. This may be easier for very small businesses or sole traders. However, when the transaction is more complex, the parties often hire an accountant to prepare an informal estimate of the transaction value.
If a dispute arises about the value of your business or the matter goes to court, a formal family law valuation should be carried out. For a formal family law evaluation, you should consult a professional business valuer. Appraisers have certain legal requirements that they must meet and must meet professional standards in their field. Our team can help you find the right qualified appraiser to conduct your business valuation.
With some exceptions, courts typically require co-appointed individual appraisers to conduct business valuations. This means that you and your ex-partner will need to agree on who will carry out the business valuation. Typically, we recommend that one party select her three potential reviewers and the other party select her one of those three. Typically, lawyers for both parties will write a letter requesting expert assistance. In this letter, the attorney requests a quote and informs the appraiser of any additional information needed. The cost of the appraisal is usually split 50-50 between the parties. In some cases, if one party is unable to pay, the other party may initially pay the costs and recover the costs in the final settlement.
The lawyer also typically sends the appraiser the financial statements, tax returns, trust documents, and information obtained from the company’s accountant that will be needed to evaluate the business. If additional information is needed, the expert witness will typically contact the parties’ attorneys to request the information. Appraisers examine goods and real estate owned by a company, including the company’s bank accounts, contracts, machinery and vehicles, employees, and goodwill. Exactly what is included will vary by industry and each company.
FAMILY LAW ADVICE
You have the right to know your legal rights and responsibilities. We will guide you step-by-step through the process and discuss all potential outcomes, as well as provide advice relevant to your individual situation. You can rely on the experienced Solicitors at Point Cook Family Lawyers for a wide range of legal services. Whether your case is simple or more complex, we provide sound advice and practical solutions tailored to your needs. We are experienced in all family law matters and have helped many clients resolve their issues.
To get help resolving your matter, call us on 8391 8411 or complete our contact form for an obligation free discussion.
WHAT YOU SHOULD KNOW
What needs to be done to commence a property settlement?
Can a property settlement be started before divorce?
Yes. During the period of separation, you may complete the property settlement before getting a divorce. You will need to sort out how to divide your assets and debts. This can be done via an agreement between yourself and your former spouse.
Can parties agree on a property settlement?
If you agree on arrangements, you can seek to formalise your arrangements by contacting our firm at Point Cook Family Lawyers to draft your Consent Orders. If you cannot reach an agreement, you can engage our lawyers at Point Cook Family Lawyers to apply to the Court for Financial Orders.
How are the assets divided into a family law settlement?
- The respective contributions made by both parties – determining assets and liabilities;
- Direct financial contributions by each party to the marriage or de facto relationship;
- Indirect financial contributions by each party such as gifts and inheritances;
- Non-financial contributions to the marriage or de facto relationship such as homemaking; and
- Future needs – the Court will take into account further matters like age, health, financial position, care of children, and ability to earn.
What is the time limit for property settlement?
You may organise your family law property settlement as soon as you want after separation. A minimum period does not apply. However, due to the emotional aspect of the matter, you may choose to allow a short period of time to elapse before properly considering property division. However, a maximum time limit does apply. An application to the Court for property settlement must be filed within 1 year of a Divorce becoming “absolute” for married couples or 2 years of separation for de facto couples. These time limits apply across all States and Territories throughout Australia.