Understanding Business Evaluations in Divorce Cases
Hi, I’m Oklahoma Fathers’ Rights Heath Davis. One of the biggest issues that men face in going through a divorce is what happens if I have a business and I run that business, it can become a very complicated issue. And in some instances we have to have an expert come in and perform what we call a business evaluation. This determines what the net value of the business is and what amount of money should be divided.
The complexity of it comes in in that Oklahoma acknowledges what we call personal goodwill and enterprise goodwill. Personal goodwill means that is what the value of the business is in relation to the person who owns it and is running it. A business evaluation equates to what amount of money is associated with the business itself, meaning that if the business were to be sold, what would the court value that business as, or what is the fair market value of that business?
Factors Considered in Business Valuation
So this includes things like accounts receivable. It includes things like property that is tangible, could be tractors, could be trailers, things of that nature. Personal goodwill is associated with the person itself. So what the court looks at is are people coming to the business because of the name of the business or people coming to the business because of who owns the business and who’s running the business. Again, it becomes a little bit complicated. I’m going to go in more detail on that in a video in the future, but just wanted to give you a general overview at this time.
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