Eisenberg & Spilman PLLC | Family Law Attorneys
248-469-0613
Eisenberg & Spilman, PLLC
248-469-0613
Eisenberg & Spilman PLLC | Family Law Attorneys

Call Us At: 248-469-0613

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Experienced Michigan Business Valuation Attorneys

Last updated on September 25, 2024

It can be challenging to find a divorce law firm that has the financial resources and expertise required to effectively handle complex business valuation matters involved in your divorce.

When you consult with Eisenberg & Spilman, PLLC, you can expect to work with some of the most experienced and qualified Oakland County business valuation lawyers in Michigan. Let us put decades of specialized legal experience to work for you.

Different Approaches To Valuing A Business During A Divorce

Business valuation is vital when equitably dividing marital assets, especially when one or both spouses have ownership stakes in a business. The need for a business valuation arises because that’s the only way to provide clarity in settlement discussions and avoid disputes about a company’s value that could prolong the divorce process.

Here are three of the most common methods for valuing a business:

  • Asset-based approach: This focuses on the business’s net asset value, calculated by adding the value of all assets and subtracting its liabilities. Although this method is straightforward, it may be less effective for service-based companies where intangible assets, such as brand reputation or intellectual property, hold more value than anything the company may own. During a divorce, the asset approach is often used when tangible assets, such as real estate, investments and heavy machinery or stockpiled raw materials constitute the bulk of a company’s value.
  • Market-based approach: This method determines a business’s value by comparing it to other recently sold companies in the same industry and market. It relies on the principle of supply and demand and uses metrics like price-to-earnings ratios or revenue multiples from comparable sales. It is helpful for businesses in well-defined markets with numerous comparable sales. During a divorce, the market approach provides a realistic picture of what the business might sell for in the open market.
  • Income-based approach: This approach values a business based on its ability to generate future income. The method projects future cash flows and discounts them to present value using an appropriate discount rate. The income-based approach can help ensure both parties understand the ongoing financial benefits one spouse might continue to enjoy post-divorce, thereby informing fair alimony and settlement terms.

Choosing the appropriate valuation method depends on the business type, available data and the specific circumstances of the divorce. Engaging professionals who can objectively assess the business using different methods and working with an experienced attorney can make for a fair and equitable resolution during a divorce.

Let Us Help You Obtain Outstanding Results

In every case that we handle, we strive to achieve the most favorable results for our clients, ensuring that their divorce settlements are in their best interests. For this reason, thorough business valuations are critical in your divorce case.

Over the last three decades, lawyers Laura E. Eisenberg, J.D., and Amy M. Spilman, J.D., have provided our clients with the resources needed to properly value business assets and the income that they generate.

Our firm networks with the best business evaluators in the state and throughout the country, including real estate appraisers, forensic accountants, tax and estate planning attorneys, and specialized appraisers when valuing business assets, including:

  • Family and closely held businesses
  • Income generated from business
  • Commercial real estate
  • Other business property (vehicles, machinery, etc.)

Every case is different, which is why our Oakland County business valuation attorneys are committed to helping you find the most effective resolution in your divorce. While we will help you explore all alternative dispute resolution options to avoid expensive litigation, our lawyers are fully equipped to aggressively represent your case in court.

Frequently Asked Questions About Business Valuations

Here are some of the most common questions our clients have about what will happen with their business in a divorce:

What is a business valuation?

A business valuation is the process of determining a company’s total economic value. Business valuations can be necessary for a variety of different reasons, including establishing the worth of a minority partner’s share of ownership, sale value, or for purposes of either property division or spousal support calculations in divorce.

How do you calculate the value of a business in a divorce?

As mentioned above, three of the most common methods of valuing a business include the asset-based, market-based and income-based approaches – although there are other possible methods. Not every method is right for every business, and the three methods can sometimes yield drastically different approaches. If no premarital or postnuptial agreement addresses the method of valuation in a divorce, this can become a hotly contested issue.

What type of business entities can be appraised?

Virtually any business model can be appraised for its value, whether that is a fully incorporated business, a limited liability company, a partnership or a sole proprietorship. Each type of business structure can present unique challenges to valuation, especially if its book value and revenue are drastically different.

Can my CPA appraise my business?

A Certified Public Accountant (CPA) may be qualified to perform a business appraiser, and they often have significant familiarity with their client’s industry that can be useful. However, when a business is valued for a divorce, both sides generally have to agree to the method and appraiser. You may encounter resistance from your spouse to the use of your CPA for this purpose because they may not be deemed a “neutral party” due to your working relationship.

Why work with an attorney for a business valuation?

An attorney can help you understand what is at stake with the valuation, the best valuation method to use for your type of business and find the right valuation expert to provide expert testimony if there is conflict about the results of a valuation.

Providing Thorough Business Valuation Counsel

Call us at 248-469-0613 to schedule a confidential consultation to discuss your business and divorce-related matters. In addition to our regular business hours, evening and weekend appointments are available upon request. We accept Visa, MasterCard, American Express and Discover credit cards.