Rakesh Kapila highlights key aspects underlying valuations of family businesses on divorce & outlines ways in which such businesses can help in funding financial settlements
- Why business valuations are important.
- Ways of extracting funds from family businesses.
The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or in dissolution settlements. Since the business valuation may be the most significant component of the total matrimonial assets, it needs to be ascertained with care, normally with expert assistance, in order to achieve a fair division of family wealth on divorce.
Why are business valuations important?
Business valuations are important for a number of reasons, including the following:
- Proper account needs to be taken of a number of aspects which can affect the valuation, including whether both parties are involved, whether the business owner is a sole trader, a partner or a shareholder,
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