Avoiding Costly Shareholder Disputes

Dispute Resolution

Avoiding Costly Shareholder Disputes

Business ownership can be complicated, particularly when there are multiple shareholders. The odds of disagreement and conflict among shareholders over various issues can be very high. When shareholder relationships break down there must be a mechanism in place for dealing with the dispute or for enabling one or more of the shareholders to exit the business in a pre-determined manner. A shareholder buyout can quickly turn into a costly dispute if the value of the business has never been discussed and agreed to among the shareholders. Different shareholders likely have different expectations regarding the value of the business. Having an […]

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The Final Step to Reviewing a Business Valuation Report – Consult a CBV

You have now completed your review of a business valuation report by considering: The type of valuation report; The author’s credentials and qualifications; Any scope limitations underlying the conclusions; The valuation approach(es) adopted; The reasonableness of the projected cash flows or historical normalization items; The reasonableness of the discount rate, capitalization rate or valuation multiplier; Any redundant assets owned by the business; The income tax implications; and The overall reasonableness of the value conclusion. The final step involves consulting an independent Chartered Business Valuator (CBV). In the context of a legal dispute (e.g. commercial, shareholder or matrimonial dispute) this step […]

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Enhance Value, Manage Wealth, Avoid Costly Legal Disputes

This past week I presented to a group of business owners on the importance of having a professional business valuation.  In addition to many situations where an independent business valuation is required (e.g. estate freeze, shareholder or matrimonial dispute litigation, purchase or sale of business, etc.), a business valuation can also be a very powerful planning tool.   Speaking as a professional business valuator, obviously I am biased.  However, you will find that others agree, as evidenced by the following:   “It is important to get a professional business valuation, since owners may grossly overestimate or underestimate the value of their business.” [1] […]

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