Business valuation is the process of determining the overall value of a particular business or company. Determining the exact business value can often be complicated, even for small businesses and partnerships. However, an accurate approximation of a business’ total worth can be determined from:
The business laws in each state may have different rules when it comes to determining business valuation. The exact calculations and valuation methods may also depend on many other factors, such as the type of business involved and the purpose for which the valuation is being made.
Business valuation becomes necessary in many different situations, especially where the overall worth of the business is in question. Some examples of instances where business valuation may be needed include:
Also, a business owner may wish to conduct a business valuation from time to time in connection with performance evaluations or similar reviews. A periodic business valuation can help determine whether it is profitable to continue the business operations, and to help identify possible areas of improvement for the company.
While business valuations may be necessary for the company, they can also be a source of legal disputes in many cases. For example, a business valuation may involve disputes with other parties, such as:
Business valuation methods can involve disputes over:
In order to protect the company and its members from economic losses, it is generally best to include some provisions regarding business valuations within the company bylaws or operating rules. Also, whenever a contract is made in connection with the business, the parties may wish to include a clause addressing business valuation matters. This can help to avoid disputes and provide written records in the event that a lawsuit arises.
Business valuation laws can be complex and will also vary from region to region. If you need assistance with business valuation issues, you may wish to hire a business lawyer for advice. Your attorney can help you determine how best to conduct a business valuation, so that you obtain accurate results. In the event of any legal disputes or lawsuits, your lawyer can help represent the company in order to protect the company’s assets and properties.
Last Modified: 06-30-2015 11:37 AM PDTLaw Library Disclaimer
We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.