Thursday, February 3, 2011

Business Valuation Services: Commonly Asked Questions

By Sherry Smithson


Business valuation services are used in business matters that involve financial transactions. In some cases, the transactions are strictly corporate, while in others they involve the valuation of assets owned by individuals. Below, we answer some frequently asked questions pertaining to both types business valuation services.

1. When Is a Business Valuation Service Appropriate?

There are three situations that establish the necessity of hiring a business appraiser: when two parties cannot agree on the value of a transaction's object(s); when valuation is recommended prior to a transaction to prevent disagreements; and when valuation is legally/contractually required.

2. Prior to a Share Buyout, Can Shareholders Ask For Share Valuation?

Shareholders, either as individuals or as a group, can hire a business appraiser to conduct share valuation prior to a share buyout. A common scenario of shareholder requested share valuation is when a company attempts to buyout minority shareholders through a squeeze out merger or a reverse stock split.

3. Can Valuation Services Help in Estate Planning?

Estate planning has for many years, involved valuation services. The valuation of a family owned business is intended to reduce the tax obligations of those who inherit it. To shelter the business from estate taxes, a business appraiser or attorney specializing in estate planning will recommend engaging in a limited partnership.

4. During a Divorce, Will Valuation Services Support Asset Distribution?

Asset valuation is valuable for divorces where the equitable distribution of assets remains in question due to the complexity of assessing the value of certain assets, such as business ownership or stock. As for divorces where spouses oppose equitable distribution, divorce attorneys and/or divorce mediators should handle the resolution process.

5. When Does a Breach of Contract Necessitate Economic Damage Analysis?

If a contract violation produces economic damage to a business, specialists in economic damage analysis are often called upon to help get the parties concerned on the same page. In regards to the total harm produced by the breach and whether it warrants economic damage analysis, is up to the petitioner.

6. How Much Are the Fees for Valuation Services?

Valuation agencies charge different rates for each service. To get the most precise approximation of the costs, get in touch with a valuation agency to discuss your case. With agencies charging different rates for different services, universal estimates are often less or more than the actual cost because of the variety of rates and time needed for each valuation.




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1 comment:

Lisa Jones said...

I can't help suspecting this could be utilized as a contention for historical centers to go for broke to attempt to accomplish business manageability (being valuable to the point that they can acquire the salary expected to succeed through means other than raising support) or for them to disregard that objective.
With organizations, manageability is unquestionably a moderate objective that is regularly inconsistent with the objective of development (particularly fleeting development). Be that as it may, with galleries, so few are financially feasible that endeavoring to accomplish maintainability may be on the a great deal less traditionalist end of the working range, requiring significant dangers.
Merger and Acquisition valuation