Pesce Law Group, P.C.

FREE CONSULTATIONS 630-352-2240

Naperville | Oak Brook | Burr Ridge | Lake Forest | St. Charles

Business Valuation Attorneys in Glen Ellyn

DuPage County Business Valuation Lawyers

Businesses do not have price tags. Moreover, the statistics in a balance sheet can sometimes be deceptive; for example, a particular accounts-receivable balance may be, essentially, uncollectable. Further complicating matters, all businesses have intangible assets, most notably customer and supplier goodwill. The best way to value businesses, for divorce purposes, is to take a measured approach that relies on established methods.

At Pesce Law Group, P.C., we routinely handle business valuation and property division matters. Although every case is different, we rely on proven techniques that have been developed and refined through many years of practice. Our goal is to craft an equitable property division that upholds your legal and financial interests, both in the short and long term.

Factors to Consider

Ever since it was released in 1959, IRS Revenue Ruling 59-60 has been the leading authority on this subject, and Illinois courts have consistently upheld both its specific findings and general principles. To value a business, for divorce purposes, the examiner should consider:

  • The type and nature of the business, beginning with its inception date,
  • Company's maximum earning capacity,
  • Stock's actual market value,
  • Business' current financial condition,
  • Overall economic outlook in general, and the industry's outlook in particular,
  • Value of comparable stocks being traded on the open market
  • Stock sales and number of shares,
  • Dividend capacity, and
  • Any intangible assets, including business goodwill.

The Ruling stresses that each valuation is fact-specific, and the prongs should be given varying weight according to individual circumstances.

Overall Approaches

During the valuation, the appraiser may use one of three overall models, in addition to the specific questions in Revenue Ruling 59-60:

  • Market Approach, which uses comparable sales as a guideline,
  • Asset Approach, which considers only the enterprise's tangible and intangible assets, or
  • Income Approach, which gives great weight to the company's actual and potential income.

Choosing a Valuator

Not all accountants are necessarily qualified to conduct a business valuation, especially where small or medium-sized businesses are concerned. The American Institute for Certified Public Accountants requires that a CPA complete additional training to be an Accredited Business Valuator. That training includes, at a minimum, a completed apprenticeship program, a written exam, and additional annual continuing education hours. Pesce Law Group, P.C. attorneys network with professionals in other disciplines, so we are an excellent resource to locate qualified appraisers.

A proper and accurate business valuation is an integral part of a divorce property settlement. For a free consultation with experienced family law attorneys, contact Pesce Law Group, P.C. at 630-352-2240. Convenient payment plans are available.

Related News

Read More
Can Divorced Couples Remarry Each Other?
Can Divorced Couples Remarry Each Other?Divorce can be painful for any couple. It is especially true for people who still love and care about each other but cannot manage to live together. In most cases, an ended marriage remains that way. However, in rare cases, people who got divorced from...
Debunking Common Myths About Divorce
Debunking Common Myths About DivorceNo matter the circumstances, divorce is generally not something people consider a nice experience. However, there are many misconceptions about what happens when a couple ends their marriage. Many people are surprised to find that their lives became much better after they left their unhappy...
What Are the Mental Health Effects of Divorce?
What Are the Mental Health Effects of Divorce?People tend to think of their wedding as the start of their "happily ever after," but for approximately 41 percent of couples in America, it can be the opposite. With divorce affecting so many people, there is increasing awareness of how it can negatively or positively...
Back to Top