A Legacy Intact: safeguarding your family business in the event of divorce - Book - Page 39
The starting point, which is slightly
artificial, is the price an arm’s length
purchaser will pay for the shares.
Accordingly, the valuation of private
company shares can be complicated.
When disclosure is given as part
of the negotiation process it is
THE VALUE OF A BUSINESS IS A KEY ASPECT
O F A N Y F I N A N C I A L S E T T L E M E N T. W H E R E
A SHAREHOLDER AND NON-SHAREHOLDER
SPOUSE CANNOT AGREE ON A VALUATION,
T H E E N G L I S H FA M I LY C O U R T H A S T H E P O W E R
TO APPOINT AN EXPERT TO DO THE JOB
Company valuations can often be
likely that the shareholder spouse
a contentious subject in divorce
will put forward a valuation based
proceedings. The Family Court will
upon
examine the value of the company
perhaps a valuation prepared by
at the time of the marriage (or,
the accountants/auditors of the
if later, the date of receipt of the
company.
available
information
and
shares) and assess the growth
in value during the marriage or
It may also be that a recent valuation
the actual period of ownership
undertaken for another purpose is
during the marriage. It then has to
available which can be relied upon
determine how that value should be
and be useful in supporting the
accounted for within the distribution
figure attributed to the shareholding.
of the assets between the spouses.
However, it is fairly common for the
non-shareholder spouse to seek an
independent valuation rather than
agreeing to rely upon a valuation
produced by or on behalf of the
shareholder spouse as part of his or
her disclosure.
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