How to value your business for divorce proceedings

On Behalf of | May 21, 2022 | Divorce, Property Division

If you are going through a divorce, you probably worry about what will happen to everything that you have worked hard to obtain. Entrepreneurs especially have put immeasurable sweat equity into their businesses and likely fear that they could lose half of what they have spent years building.

Here is an overview of how to value your business for divorce proceedings in Massachusetts.

1. Calculate the income

How much profit your company generates will impact the valuation of the entity. You must tally all of the revenue that comes into the company and also all of the expenses to arrive at the net profit. This will take time to complete but should take place as close to the date of your divorce hearing as possible.

2. Compute both liabilities and assets

In addition to providing a figure for your company’s profit, you must also provide a document noting all assets and liabilities. Assets included must encompass both tangible and intangible items. Intangible assets can include intellectual property in addition to client lists and established relationships with customers and other businesses.

3. Consider hiring an expert

Making these calculations on top of going through a divorce can feel overwhelming. Professionals can assist you with the number crunching and free you up to focus on getting the rest of your life in order and moving on.

Anyone who owns a business is likely concerned about how the dissolution of a marriage will affect their bottom line. The first step is ensuring the entity is properly valued.