One of your greatest allies in avoiding expensive litigation affairs can be a business valuation! Recently more and more businesses across Toronto are using business valuation to their benefit.
It’s not unlikely that during legal disputes, whether it be from matrimonial or a partner or shareholder, the business’s value is an area of contention. Chartered Business Valuators, or CBVs, may be summoned by the court to provide expert testimony on a business’s value. Especially for cases of a potential shareholder dispute, business valuation reports help to give an unbiased and wholly independent insight on the business and value of shares.
Partner Disputes
Having a partner who desires to leave a business is never easy. A critical part of the buy-sell agreement is knowing the exact value of the existing partner’s stock. This is where a business valuation can come in to resolve the problem. It can also aid the remaining owner or owners by fully establishing a proper process and value to give shareholders peace of mind and leave them fairly compensated.
Shareholder Disputes
Because this can arise from such issues as a shareholder believing they have wronged and gotten the short end of the stick from a controlling owner disputes can be quite complex to settle peacefully. When shareholders can have the business independently valued regularly and discussions are open, this can significantly reduce the chance of a dispute over a business’s value when a shareholder or multiple decide to go their separate ways.
Marital Dissolution
Divorce can be an emotional and contentious affair, the last thing people want is finances to be another point of contention and draw out the process even more.
It is not uncommon for one to inflate or deflate the value of the business to play into their own interests. Thus, having your business receive an independent business valuation periodically is highly recommended by our team at VSP. By having a team that knows how to fully assess the future and current operations of a business they can successfully arrive at an independent, supportable, and reasonable value for the company.
What Does a Valuation Report Include?
Not all valuation reports are the same, results may depend on the valuator preparing the report, potential resources available, multiple factors to be taken into consideration, and even the date the valuation was conducted. Typically a standard valuation report can include:
- The purpose
- The scope
- Full review of the business
- Methods used
- Overview of the market and local conditions that affect the value
- A conclusion including compiled results from the valuation methods used
- And passages detailing how the report complies with professional standards, the main assumptions made, and the valuation expert credentials.
Getting a Business Valuation Ahead of Time Can Give You Great Benefits
- Gain a better understanding of company assets
- Enter more profitable acquisitions and mergers
- Access to higher quality investors
- Understand the potential resale value
- And, ultimately, avoid costly legal battles
Looking for a Business Valuation?
Look no further than VSP! Our team offers fully independent, professional and supportable valuation services that can not only help you with partner, matrimonial, or shareholder disputes but will also help you ultimately make smart and informed business decisions.
Contact us today to protect your finances and your business!